THE PRESIDENT. We are here this morning to celebrate a great victory, and it's a victory for every single American citizen. The fight to have the windfall profits tax signed into law has been won at last, and the keystone of our national energy policy for which we have waited so long is now in place.
Exactly 1 year ago this week, I first proposed the windfall profits tax to the Congress and to the people. I did it because I knew that it was necessary for our country and the people in it to benefit from the decontrol of oil prices, which is so crucial, both to the conservation of energy and to the development of United States sources of energy. And I want to thank all those who are assembled here today for the great work they have done.
A little later I'll recognize specific ones, but I particularly want to call out those that knew in the Congress that our mutual commitment would be necessary if we were ever to produce new oil, to conserve oil, and to apply our genius to finding alternative sources to oil in this future that lies before us.
We have in the past been actually subsidizing the consumption of excessive amounts of energy; therefore exacerbating an already bad problem, holding high the import of oil from foreign countries. And at the same time we believed when we initiated this effort that through this fair tax we could divert the unearned profits of the American oil companies to our poor, to improving rapid transit, urban transit, to providing new energy sources, and to conservation of energy. But many politicians and many in the press said that we could never get such a bill passed because of the powerful influences that had been focused against it.
We knew that we could realistically get this tax only if we had the courage to do what all the experts advised and what I myself believed, and that is to go ahead with gradual decontrol of oil prices in our country. We planned the two together as part of one policy. And today they are joined together in one energy policy for America.
Today, determined effort on the part of many people have won this victory. We have faced political attacks, we have faced special interests' pressures, and we have triumphed. That's why the final passage of the windfall profits tax means so much to all of us here. It's proof that through patience and firmness the Government of our great Nation can prevail over the most serious obstacles focused by special interests and by political timidity on the part of some. I'm proud to tell the American people today that the windfall profits tax is no longer just a promise; it is indeed a fact.
Now this victory brings us to the verge of enacting the national energy policy in its entirety that I've been working on since I made my first energy proposals to the country exactly 3 years ago and characterized the prospective problem as the moral equivalent of war. We anticipated then that by 1985 that we would have an intersection of the amount of oil available in the world with the amount of oil being demanded in the world. In other words, the demand would equal or exceed supply.
That event occurred last year, and the enormous inflation pressures that exist in our country and others is a direct result of the lack of an adequate American energy policy in previous years. At last now, America will have both the incentive and the means to produce more oil here, to conserve more oil here, and to replace more oil here with alternative forms of energy.
I especially congratulate Senator Byrd, Senator Long, Congressman Ullman, Congressman Conable, and many other Democrats and Republicans, and the members of the staff of the Ways and Means Committee, the Senate Finance Committee, and the Joint Committee on Taxation for their hard work and their dedication under the most trying and difficult circumstances in developing this crucial legislation. The issues involved here were extremely complicated and the debate sometimes was heated, yet they persevered and they acted in the best interests of our country.
I also want to thank Governor Brendan Byrne, standing behind me, from New Jersey, the cochairperson of the citizens committee for a windfall profits tax, and especially the 40 labor unions who joined in with this effort to make the windfall profits tax possible. This citizens committee brought together a powerful and a forceful and effective coalition to help my administration with a fair tax by educating the public concerning the benefits to be derived from this action. Many on the committee gave tirelessly of their time and their experience and their influence. And they've shown that the public can be heard, and when the American public is heard clearly, it will prevail.
When I proposed this tax I indicated that the revenues should be used for three basic purposes: one, to assist low-income households in bearing the burden of rapidly increasing energy costs; secondly, to improve the transit systems of our country, including not only rail but also buses and subways, and even the sharing of rides in other rubber-tired vehicles; and third, the development of alternative supplies of energy. We have placed a special emphasis on conservation. We must not lose sight of these three basic goals if we are to overcome inflation and the risks to our national security caused by our overdependence on foreign oil, which is now comprising almost half the total oil that we use. We must mount a massive effort to develop American energy resources and do it now and without delay.
Our country, .as you all know, has abundant coal resources. We must convert our electric utilities to coal and other fuels, away from oil. We must find ways to turn coal into gases and liquids which can substitute directly for oil and for natural gas. We must and will make our homes and our apartments, our businesses and factories, our vehicles more energy-efficient. The windfall profits tax will provide us with revenues to carry out these goals and these purposes so important to every one of us.
We must get on with the job of developing solar energy and other renewable forms of energy, such as gasohol, wind, wood, and water. Again, the windfall profits tax will provide us with the resources to carry out these purposes.
The conference report of the windfall profits tax provides guidance on the use of the $227 billion which will now be available for our country for these purposes. It is important to point out that all of the expenditures of the funds raised by the windfall profits tax do require specific authorization and appropriation by the appropriate committees of the Congress through the normal legislative process. This provides both the administration and the Congress adequate flexibility from year to year to determine exactly how these funds will be used for the best interests of our country. For low-income assistance, for mass transit, alternate forms of energy—these purposes must be met.
The legislation gives us guidance that a substantial portion of the tax, 60 percent, might be used for income tax reductions, or in the absence of that action by the Congress, to reduce the national debt.
As I've said before, the first priority in the congressional deliberations this year is to have a balanced budget for the fiscal year 1981, and we will have that balanced budget. Once the Congress has demonstrated its resolve in meeting this goal of a balanced budget, then we consider, through the normal legislative processes, tax reductions. But we must not be deterred that the first order of business is fighting inflation. Inflation is in an 18-percent level—an 18-percent tax on being alive. And that is a tax that we have to cut first, the tax of inflation, and this victory today has proved that by standing firm, we and the American people can prevail.
The windfall profits tax also provides vitally needed funding for our program to reduce and to assist the low-income people with their burdens in meeting the rising cost of energy. We are a compassionate nation, and we will not ignore the needs of those who are hardest hit by rising OPEC prices.
The bill I'm signing into law today is an historic step to the Nation's energy security, but we have still several pieces of unfinished business before the Congress that must be passed. The conference report on the energy mobilization board, designed to cut redtape and speed decisionmaking in our country on critical energy projects, must be completed. The House and Senate conference must also complete work on the omnibus legislation which provides for a synthetic fuels corporation, for energy conservation, for the development of solar energy, biomass. And the areas of difference, as you know, between the House and Senate have now been narrowed considerably, but apparently we still have a long way to go. This is crucial legislation, these two bills which should be passed now without further delay.
Winning passage of this fair and equitable law makes me confident that we can and will act together in a positive spirit to take on other tough battles in the struggle to defeat inflation and to improve our Nation's security. We know that that will not be easy. The passage of this bill has not been easy, especially with all the clever slogans and the quick deceptions and the call for magic or simple solutions that have been put forward in this election year. But the American people know that it is always easier to attack a plan than to create a plan. It's always easier to destroy a consensus than it is to create a consensus. It's always easier to serve a partisan interest rather than to serve effectively the national interest.
We would not have arrived here today to celebrate this victory for America if we had looked for easy ways out or if we had attempted to mislead the American public. Now, armed with the resources of the windfall profits tax, I know we can finish the task of making our great Nation, the United States of America, an energy-secure nation. That's our goal. We've taken a major step today to accomplish that goal.
Thank you very much, and now I'll sign the legislation.
[At this point, the President signed the bill.]
SENATOR ROBERT BYRD. Mr. President, a year ago, the pundits were saying that a windfall profits tax would never be passed. As a matter of fact, I heard on television that it was dead a year ago. But the pundits also said that the Wright brothers couldn't fly. [Laughter]
This is a very important occasion. And it wasn't easy, as you have said so correctly, but this represents the centerpiece of our energy policy. And it also is an example of bipartisanship at its best and legislative compromise. I congratulate you for your patience and for the leadership that you demonstrated, Mr. President. I congratulate Russell Long for the statesmanship and the courage that he demonstrated. I congratulate all the others who had a part, both in the administration and in the Congress.
Mr. President, this bill represents good energy policy and wise public policy. It is an important step, but it's just a step, and other steps need to be taken. And you have properly enumerated them, and we intend to continue to work until the day comes when those objectives too will have been achieved.
THE PRESIDENT. The Speaker's not here to represent the House, but he's worked very hard on this bill. I would like to call, however, on the chairman of the Ways and Means Committee in the House, Congressman Al Ullman.
REPRESENTATIVE ULLMAN. Thank you, Mr. President.
I want to first commend my Committee on Ways and Means, that worked hard to originate this legislation. We passed it in the House last June, of last year. And also the members of the conferees) Senator Long—this was one of the toughest conferences that I've ever participated in. And I want to say that it took a bit of statesmanship on the part of some of the people who had very special concerns and interests in this legislation.
Mr. President, it's not often that you can pass a tax that is not levied on the American people. And I think that's a point, that in this whole legislation the world price of oil will set the prices that the American consumers will pay, and this is a tax that is merely levied against the producers, and it's phased out in order to prevent windfall profits.
This is a very important milestone, and I want to commend you, Mr. President, Secretary Miller, and the others that have been working with us so diligently through the months.
THE PRESIDENT. Senator Long is customarily modest, and he has suggested that we call on someone in his committee to speak for the committee, because it was a broad-based effort. And I think he's asked that Bill Bradley be called upon to say a word.
SENATOR BRADLEY. Mr. President, playing a small role in the passage of this legislation, in my first year in the United States Senate, has been important and instructive to me. I think that our chairman, chairman of the Finance Committee, Senator Long, was in a very difficult position and, I think, performed the role of chairman in a remarkably effective and fair way. I think the leadership that Senator Byrd demonstrated is the example of the kind of leadership that we need as we face the complex energy problems that you've so clearly delineated that are before us in the months ahead. And passage of this legislation and your signing it today makes me proud to be an American, and I think it's a significant achievement for your administration and your efforts and effectiveness.
THE PRESIDENT. I'd like to call on Governor Brendan Byrne to make a few comments from the perspective of the citizens' committee which he headed. No one will ever know the amount of effort that was put forward by this group. They were all volunteers; they worked without ceasing; they worked quietly, but they worked effectively. And they marshaled the influence and support of the American people to help me and the Congress make this wise decision. Brendan Byrne.
GOVERNOR BYRNE. Thank you very much, Mr. President. A lot of Governors have been looking for the opportunity to speak from a White House platform. [Laughter] One of them dropped out last night, I understand— [laughter] —another one may take a little longer.
I'm proud to be here, proud to follow my Senator. We've got a Senator from New Jersey you can look up to. [Laughter] I almost wish that the President hadn't called on me, because now I have to try to identify all of the people here who helped in the citizens' coalition.
THE PRESIDENT. Just let them stand up.
GOVERNOR BYRNE. If they would all stand up?
THE PRESIDENT. Sure.
GOVERNOR BYRNE. Okay. Marilyn, can you get them all to stand up? Everybody who is here from the committee, representing the committee, who helped us
THE PRESIDENT. Everybody on the committee, stand up.
GOVERNOR BYRNE. And Ruth Hinerfeld in the League of Women Voters, and Bob Georgine, the American Association of Retired Persons, and so many others, APTA [American Public Transit Association]—now I'm in trouble, right? [Laughter] But I just wanted to say that this was a genuine effort by a lot of people for the right cause.
I want to again express my admiration for this President. There are those, as you know, if the President were to walk across the Potomac this morning, would headline that the President can't swim. [Laughter] There are those who criticize because you were supposed to get this passed by Christmas, and it's Easter; and that it is a couple of billion short of what he targeted. But one of our papers in New Jersey called this Jimmy Carter's greatest victory. Another paper editorialized against windfall profits tax with a black border around the editorial, the first time maybe in the history of that newspaper.
This is a great victory. It's a great victory because a lot of people worked very hard to make it so. Most of all, it's a great victory because we have a President who's been determined to see what's right for this country and to do what's right. I'm very proud of him, very proud to have been head of the committee that in some small way achieved this great victory.
Thank you, Mr. President.
THE PRESIDENT. It would be appropriate to call on many other people this morning, because so many have played a role in this important victory. And there were times when the prospects were very discouraging, but the patience and tenacity was instigated by a sure knowledge that this legislation, however complicated and however difficult and however fraught with political pitfalls, was important for our Nation. And to conclude the remarks this morning, I would like to call on the Secretary of Treasury to come and say a word this morning. Bill Miller.
SECRETARY MILLER. Thank you, Mr. President.
This indeed is a giant step forward on two counts: This represents a major component in forging the national energy policy, the new national energy policy, which will hasten the day when we achieve greater self-sufficiency and reduce our dependence upon the uncertain and fragile lines of supply of foreign oil; and second, because we shall never win the war against inflation until we deal with the energy issue. And so, this is a very important milestone on the way to solving the inflation problem.
Mr. President, when I was sworn in last August as the 65th Secretary of the Treasury, and you asked me to work upon this matter, I thought you were contemplating the 66th Secretary. [Laughter] But I must say it has been a great sense of privilege and pleasure for me to work on it, to be assisted in my task, under your leadership, by Secretary Duncan, who cannot be here today, and the whole Department of Energy; Stuart Eizenstat, the entire White House staff—all of the administration has worked in teamwork that I've not seen in any comparable situation. I think it is a great commendation to your leadership, to the commitment and dedication of the administration, and I'm proud and privileged to be a part of it.
It is a giant step, but only a step, and so I think we now need, on behalf of you, those of us who have responsibilities, to now carry forward and take the other steps in combination with the Congress, the private sector, to achieve this energy independence, energy self-sufficiency which you've outlined this morning.
Thank you for including me this morning.
THE PRESIDENT. As those of you who studied the legislation know, it's effective the first of last month, March 1, so Bill will have a particularly interesting and exciting and gratifying experience the next few days in beginning to collect— [laughter] the receipts. And I think this is a major step toward not only controlling the excessive dependence on foreign oil and making our own Nation more self-sufficient but holding down the price of international oil. The decisions made by OPEC will be determined to a major degree by how much we can lower our excessive demands of a limited supply of international oil. And of course, this will help to alleviate, on a worldwide basis and particularly for our own country, the increasing pressures of inflation. I think we're going to see some good news on inflation in the next few months.
Again, thank you all for being here. It's a great day for our country.