President Ford submitted to Congress yesterday the bleakest State of the Union message in decades, urging massive tax cuts, a red-ink budget and higher fuel costs to overcome recession and energy shortages.
"The state of the union is not good," Ford told a nationally broadcast joint session of Congress. "I've got bad news and I don't expect applause."
"Millions of Americans are out of work," Ford continued. "Recession and inflation are eroding the money of millions more. Prices are too high and sales are too slow."
The president called for a "new partnership" with the Democratic Congress and outlined details of the recovery plan he had sketched in a broadcast address Monday night.
The major elements of Ford's plan are:
* A $4 billion tax break for industry by raising the investment tax credit to 12 per cent. This would be coupled with a $6 billion per year cut in the corporate tax rate;
* A broad-ranging series of taxes and levies on oil and natural gas intended to increase prices and thus reduce consumption. The $30 billion in revenues raised would be channeled back into the economy, mainly through the tax cuts.
Ford asked for standby authority to ration gasoline, but said he had rejected rationing for now because it "would produce unacceptable inequities; and
* A federal budget that will contain a deficit of about $30 billion this year and more than $45 billion for next year, sending the national debt above $500 billion.
"The emphasis of our economic efforts must now shift from inflation to jobs," Ford said in his first State of the Union message. The president said he wanted to speak bluntly to the predominantly Democratic Congress.
"The American people want action and it will take both the Congress and the President to give them what they want," he said.
"Progress and solutions can be achieved," he added. "And they will be achieved."
All of the economic steps proposed by Ford except the decontrol of crude oil prices would require Congressional consideration.
President Ford's proposed policies could raise the average family's fuel bills about $250 a year, a 26 per cent increase.
The White House said deregulation would add about $8 to the typical monthly natural gas bill by 1985; but the American Gas Association recently estimated that unregulated gas prices would more than double by 1985, increasing the monthly bill almost $35.
Federal Energy Administrator Frank G. Zarb said yesterday that Ford's energy program would add a one-time inflation of about two per cent to the nation's ballooning price levels.