THE PRESIDENT. It's a pleasure this morning to come and sign three very important documents, I think, which describe what our Nation has done this past year and what we expect to do this coming year and in the years afterwards.
As I mentioned last night in my State of the Union speech, the economy has made great progress in 1977, and we hope through proper economic decisions and careful planning and cooperation between me, the Congress, and the public sector of our Nation, to continue this progress during 1978.
We anticipate that the increase in the gross national product will be almost 5 percent, that the unemployment rate will continue to go down—perhaps not as rapidly as in 1977, but at a steady pace-and that we can indeed control inflation.
We have a strong economy. Our Nation quite often forgets in transient times of adverse monthly reports that we are still the strongest nation on Earth. We've been blessed with a free enterprise system that encourages initiative. We've been given great natural resources by God, and we've husbanded them very well and we can do better. And I think we have an attitude and a confidence that augers success for us in the future.
This Economic Report is one that describes very clearly the challenges for this coming year, and it also describes how we can indeed continue the good progress that has been shown in our Nation during the last 12 months.
I want to congratulate all the people behind me for having helped to make it possible to give this good report and who will help me during the coming year to carry out these programs and to reach the goals that we've described here.
[At this point, the President signed the Economic Report.]
Charlie, thank you very much. Would you like to add anything?
DR. SCHULTZE. No, sir. I think you did so well on it that I'm afraid anything I added would detract. [Laughter]
THE PRESIDENT. The next document that I'd like to sign today is the tax message, which I outlined in very brief terms last night.
This is a very far-reaching and complicated tax proposal, but at the same time, it greatly simplifies the tax laws of our Nation. It makes them much more fair and equitable, easier to understand, and also gives a $25 billion reduction of the tax burdens on the American people.
Included in the tax message is a delineation of substantial tax reforms, quite far-reaching; some have said the most far-reaching set of tax proposals in the history of our country. These, I hope, will be acted upon by the Congress expeditiously. Without the tax reforms, the amount of the tax reduction would not be advisable. So, tax reform and tax reduction are tied very intimately together.
I think that the Treasury Department has done an outstanding job. And even at this signing ceremony, I would like to say that throughout this document, which is highly professional in its quality, the hand of Larry Woodworth can be seen on almost every page. He will be receiving an award, posthumously, in a few moments. But I think I would be remiss if I didn't point out the great contribution that he made, the profound professionalism that he brought to his job, and the, I think, unequaled trust and confidence that Members of both the House and the Senate, the executive branch of Government, and the public placed in this wonderful man. Unfortunately, he died this past fall, but his memory lives with us. And I think the superb quality of the tax message is attributable in a great degree to his contribution.
Secretary Blumenthal, I'd also like for you to congratulate all your people for the good work that has been done. I look forward to a rapid passage of this legislation. It will be effective, according to our proposal, on the 1st of October 1978.
We anticipate fairly good economic news for the United States the first two quarters of this year. We have a good momentum going, fairly low inventories which will encourage production to continue to go up. But without this tax reduction, the dampening effect of the present trends will be felt the last half of this year. And we want to be sure that this progress that has been realized is uninterrupted and that tax reduction will be the key to sustaining growth, reduction in unemployment, and the containment and control of inflation.
So, I'd like now to sign the tax measure that will go to Congress. The tax measure will go up when?
SECRETARY BLUMENTHAL. Saturday.
[At this point, the President signed the tax message.]
THE PRESIDENT. Saturday. In both these instances, Charlie Schultze and Mike Blumenthal would have given the press a detailed briefing on them, and then the messages will go to Congress quite soon.
The third document that I'd like to sign—and this is just a part of it—is the 1979 fiscal year budget. This is the first budget that I've had a chance to prepare as President. I inherited the 1978 fiscal year budget, and we could make some last-minute changes in it.
This has been completely evolved using the new zero-based budgeting technique. It was an extraordinarily gratifying experience for me and, I think, for the officers and workers in the Office of Management and Budget. It's tight. It's well-considered. It meets the human needs of our people. It improves greatly our own national defense capability. It doesn't waste money. It has a relatively low increase in expenditures compared to previous years. It's a good step toward a balanced budget if we can sustain the economic prosperity that seems to be in progress. And I think it's a great tribute to the professionals who have helped in its preparation.
I've spent a great deal of time this past year in meetings with the budget officers and also in meetings with the leaders of the departments and agencies who will be served well by this budget. We have, I think, a good presentation to make to the Congress, and I believe it will be well received.
So, I'm proud of the '79 fiscal year budget and believe that in the future, we can do an even better job as the innovative and progressive consequences of a zero-based budgeting technique are learned even better by the agencies of our Government.
[At this point, the President signed the budget message.]
Mike, would you or Jim like to add a word?
SECRETARY BLUMENTHAL. No, Mr. President. I think you've said it all.
THE PRESIDENT. Well, I won't answer questions this morning on these, but as I said earlier, Jim Mcintyre, on the budget, and Mike Blumenthal, on the tax reductions and reform measure, 'and Charlie Schultze, on the economy, will be available for complete briefings on these documents and on our proposals.
Thank you very much.