Remarks at the Annual Meeting of the Chamber of Commerce of the United States.

Thank you very, very much, Mr. Morrison, Mr. Lesher, distinguished members and guests of the Chamber of Commerce:

It was exactly 1 year ago, less a couple of days, that we last met here in Constitution Hall. There were dire predictions by distinguished labor and political leaders that we were headed pellmell into a deep depression, that unemployment would soon exceed 10 percent, and that only massive Federal action could avert calamity.

Not all of us knew then, but most experts now agree that was the very time we hit the bottom of the worst recession in 40 years. Between last April and May, things turned around and began getting better instead of worse.

Consider what has happened since our last meeting. The rate of inflation has been cut more than half, and for the last 3 months has held steady at an annual rate of 2.9 percent. The personal, spendable income of American families increased by $100 billion. Farm income is at an all-time high, and so is production.

The gross national product rose during the first quarter of this year at an annual rate of 7.5 percent. While a year ago it was over $1.4 trillion, today it is estimated at over $1.6 trillion. Total retail sales are up more than 17 percent; automobile sales are up 70 percent over a year ago; food sales are up more than 9 percent; general merchandise is up 13 percent.

Today, more Americans are gainfully employed than ever before in the 200 years of our national history, a total of 86,700,000 at latest reckoning. That means 2,600,000 more men and women are working today than when we met a year ago.

Unemployment is down from a national rate of nearly 9 percent in May of 1975, to 7½ percent--still much too high, but moving in the right direction.

In short, instead of meeting in the gloomy depths of a recession, we are assembled this spring in the full surge of economic recovery. Rather than wondering how much worse things will get, today we see every sign confirming and reconfirming that a strong and stable prosperity is returning across this great land.

The index of consumer confidence is double what it was a year ago. New factory orders have risen from $77 to $90 billion. Individuals and businesses are spending and investing their money with faith instead of fear. There has been an explosive release of pent-up energy in the private economy.

America's future looks brighter day by day. Everything that is supposed to be going up is going up, and everything that is supposed to be going down is going down. And all this has happened because the American people did not panic, because the great American system of free enterprise is working. It is being allowed to work without massive doses of the wrong medicine prescribed by political quick fixes for far, far too many years. It is working even better than I had hoped when I put my faith in the vitality of private initiative at the onset of this recession.

You are here as representatives of millions and millions of Americans who believe in private initiative and the free economic system. You are the people who made it work, and I congratulate you for it. I thank you and salute you for what you have done in the past 12 months.

But I am not here to celebrate with you a battle that has been won; I am here to tell you the battle has only begun. We have just begun to fight for the full recovery and lasting prosperity that can be ours, with benefits ever more widely shared among the American people, only if we continue on the straight and narrow course which we are now following.

There are many, many hazards for the helmsman on that course. On the one side lies inflation, whose cruel rocks have scuttled many great nations of the past. We have halted the runaway, double-digit inflation that prevailed when I became President 21 months ago.

There are encouraging signs monthly that we are holding inflationary pressures down. But today we face a tougher test--sustaining the economic recovery that has begun and ensuring steady, stable growth without starting another cycle of inflationary boom that leads inevitably to another recessionary bust.

On the other side looms the dread shoals of unemployment. It never did reach the 10 percent, but the unemployment rate is still severe, especially among younger workers, minorities in certain key industries in metropolitan areas.

The statistics are improving, but the corrosive effect of joblessness cannot be comprehended by statistics alone. Unemployment affects people's pride, their hope, their whole attitude toward the free society and the political system whose 200th birthday we celebrate this year.

Clearly, the creation of an economic climate in which every American who wants to work has a good job is--along with the safety and the security of our Nation in a dangerous world--a primary concern of every citizen; certainly, it is mine.

But putting America back to work is not a job for the President alone or for the Congress alone, though sometimes Senators and Congressmen seem to think they can abolish unemployment by passing new laws such as the dangerously deceptive Humphrey-Hawkins bill now pending in the Congress.

This Humphrey-Hawkins bill, for which the Congress has budgeted startup money, is a classic example of the way the misguided majority in recent Congresses reacts. Anything that seems wrong with the economy the Federal Government must rush in and fix, mainly by spending more and more billions and billions of dollars.

This vast election year boondoggie would decree that unemployment must be no higher than 3 percent at the end of 4 years. Never mind that this recession will long be forgotten by then. If not enough private jobs are available, the Federal Government will be required by law to conjure up make-work jobs.

How much would all of this cost? How long such public payroll jobs would continue? What the added inflationary impact would be really defies rational calculation. Never mind the law would get the Federal Government deeper and deeper and deeper into social and economic planning on a national scale unprecedented in all our history.

Obviously, I am against the Humphrey-Hawkins bill. Instead, I have proposed tax reductions and other tax incentives to create more and better jobs in private enterprise. Some were enacted last year and are obviously working. Others are languishing in the Congress and should be passed promptly to accelerate employment in hard-hit areas.

My budget provides funds to support adequate unemployment insurance and proven job training programs until every American who wants to work can find it. The difference between my approach and that of the Congress couldn't be more clear-cut, and I am delighted, I am glad to join the issue with them.

Putting America back to work is a challenge for all of us who really believe in the free economic system of private enterprise that has developed over 200 years in the free political environment of this country.

Preventing a resurgence of inflation as recovery proceeds and our economy expands is also a challenge for each and every one of us. To succeed demands nothing less than a reversal of the political trends of recent decades which have brought continuous growth of Federal spending, higher deficits, more borrowing, and an ever-increasing economic role for the Government at the expense of the private economy.

This is perhaps the decisive issue of our Bicentennial Year, and this issue is being very clearly drawn on Capitol Hill even as our economic recovery continues.

The best place to examine this issue now, before it becomes wildly exaggerated in election year oratory, is in the Federal budgets for fiscal year 1977, which begins next October 1, as proposed by the President and by the Congress.

This year, for the first time, there is not one Federal budget recommendation, but two--mine, as President, and the congressional budget as adopted by the House and by the Senate. The Senate has set its tentative target figures, and the House is scheduled to act on it this week. Since the two budget committees' recommendations differ very slightly, I will refer to the completed Senate version.

As businessmen and businesswomen you know something about the budgetary process. You know that a budget is sort of a real world substitute for a crystal ball, a careful compilation of current decisions and best estimates that determines the way we want to go in the future for this country.

Using dollar figures, it fixes priorities in every area of public policy. These budgets are far more realistic and revealing than political party platforms ever were. My budget and the budget this Congress is about to adopt set forth in stark contrast the differences between the way I want to go and the way they want to go.

In providing funds for new military weapons and overall national security needs, an area of the Federal budget, that Congress has systematically shortchanged by $50 billion over the past decade, the preliminary congressional figures are substantially the same as the record $114 billion defense budget I recommended in January.

On this point, for the past 3 months I have worked with the Congress and on the Congress, and I am glad they are finally getting the word. The American people want the finest Army, Navy, Air Force, and Marines that money can buy, and they don't want our unsurpassed power for peace to become a political football this year.

I'm encouraged by the Congress' reflection on this concern, but there are plenty of other differences between Congress' budget and mine. They want to spend $413 billion next year. I propose $396 billion, saving $17 billion in unneeded Federal expenditures. Also, their budget authorizes over the long term, $455 billion in new spending; mine would hold this commitment to $433 billion, again saving $22 billion.

Congress hopes to increase Federal 1977 revenues by $2 billion, but won't say how. I want to cut Federal income taxes on July 1 by another $10 billion. Congress wants to increase the fiscal 1977 deficit by $7.2 billion over my budget figure, bringing the national debt to over $725 billion. My budget would cut the rate of growth of Federal spending in half, looking toward a balanced budget in fiscal year 1977 (1979).

Simply stated, the budget proposed by the Congress is another blueprint for Federal spending, more and more of it, bigger Federal programs, higher taxes, and going deeper and deeper into debt. My budget is a balanced plan to cut in half the growth rate of Federal spending, which has run about $50 billion annually in recent years, to further reduce taxes, and to start reducing the role of the Federal Government in everybody's life.

If my plan is followed, we can have a balanced Federal budget and further tax reductions by fiscal year 1979. If the Congress has its way, there is every reason to expect that our present recovery will be followed by a new round of inflation and then another recession with higher unemployment, in the same old roller coaster pattern of the postwar years.

Last October, I warned all Americans that we were at a crossroads in our history, that we must decide whether to continue on the path toward bigger government, higher taxes, and higher inflation, or choose a new direction-halting the growth of government, restoring prosperity, and allowing individuals a greater and greater voice in their own future. My State of the Union and Budget Messages in January provided the details of the new direction that I proposed.

Now, in its budget process, the Congress has also come to the crossroad and it looks like Congress will deliberately decide to stick to the old road, a road that leads inevitably to ruin.

I supported the idea of a congressional budget process in the Congress, and I welcome it as President. This year, each Member of the House and Senate and all committees are compelled to consider the Federal budget as a whole and to apportion expenditures in some relation to expected revenues and tolerable deficits. This is the way Presidents and taxpayers have always had to consider their budgets.

The new law that requires Congress to impose fiscal limits on itself, while it is authorizing and appropriating money certainly should produce a greater measure of responsibility than the time-honored rule of tax and tax, spend and spend, elect and elect. At least I hope it will.

I welcome the contrasting approaches so clearly revealed in the two budget proposals--Congress' and mine. The upcoming battle of the budget is a crucial showdown and, with the support of the American people, I mean to fight it out if it takes all summer and more and more vetoes.

So far, I have vetoed 48 bills sent to me by this Congress and 39 of my vetoes have been sustained which, incidentally, has saved the American taxpayers some $13 billion. Let me say, there are plenty of more vetoes where those came from.

But more important, my position is plain and my budget proposals are precise. The way to sustain economic growth is to encourage our free, private economy to expand, to modernize, to produce more goods at lower prices. The way to create more jobs and reach full employment is through the private enterprises, where five out of six jobs are found. These are real, rewarding, permanent jobs with a purpose and with a future.

Furthermore, the position of the majority in the Congress is plain and their budget priorities are precise. They believe that more direct Federal intervention in our economic recovery is required to keep it going. They believe higher Federal spending on a host of social programs will stimulate a more rapid recovery and that the Government should provide jobs for everybody if private employers don't do it fast enough.

Somehow, the congressional majority still believes, if their budget can be our guide, that continued massive Federal deficits and borrowings need not be inflationary. Perhaps now that the cost of living has stopped skyrocketing, what they are really telling us is that just a little more inflation is good for you. Well, you know and I know they are dead wrong.

These economic theories have been wrong for years; they are wrong now, and we are about to prove how wrong they are. Every economic indicator says we are on the right course. I don't intend to be sidetracked now. But we Americans are practical people. We are interested in results.

The American people won't conclude the Congress is wrong in its economic approach just because I say it is or you say it is. The American people want more and better jobs, with paychecks that are worth as much next week as they were last week. Two hundred and fifteen million Americans want unemployment to come down and inflation to stay down.

Congress says the answer is another quick fix like the Humphrey-Hawkins approach. You and I know that won't work.

I will do my part, but the answer is up to you. You are the real jobmakers. I call upon you and millions like you who believe in the free enterprise system to go home and put more and more and more Americans back to work. I call upon you and millions of other Americans to demand that Congress help control inflation by cutting Federal spending and returning more tax dollars to the people who earned them.

I challenge the businessmen and businesswomen of America and all the productive people of this great country to roll up your sleeves and show the world that our great free enterprise system is still hale and hearty in this Bicentennial Year and for the future. If we fail now, we may never get another chance.

Thank you very much.