The unfinished work of the first session must be completed—­the Higher Education Act, the Juvenile Delinquency Act, conservation measures to save the redwoods of California, and to preserve the wonders of our scenic rivers, the Highway Beautification Act—­and all the other measures for a cleaner, and for a better, and for a more beautiful America.

Next month we’ll begin our 8th year of uninterrupted prosperity.  The economic outlook for this year is one of steady growth—­if we are vigilant.

True, there are some clouds on the horizon.  Prices are rising.  Interest rates have passed the peak of 1966; and if there is continued inaction on the tax bill, they will climb even higher.

I warn the Congress and the Nation tonight that this failure to act on the tax bill will sweep us into an accelerating spiral of price increases, a slump in homebuilding, and a continuing erosion of the American dollar.

This would be a tragedy for every American family.  And I predict that if this happens, they will all let us know about it.

We—­those of us in the executive branch, in the Congress, and the leaders of labor and business—­must do everything we can to prevent that kind of misfortune.

Under the new budget, the expenditures for 1969 will increase by $10.4 billion.  Receipts will increase by $22.3 billion including the added tax revenues.  Virtually all of this expenditure increase represents the mandatory cost of our defense efforts, $3 billion; increased interest, almost $1 billion; or mandatory payments under laws passed by Congress—­such as those provided in the Social Security Act that you passed in 1967, and to Medicare and Medicaid beneficiaries, veterans, and farmers, of about $4 1/2 billion; and the additional $1 billion 600 million next year for the pay increases that you passed in military and civilian pay.  That makes up the $10 billion that is added to the budget.  With few exceptions, very few, we are holding the fiscal 1969 budget to last year’s level, outside of those mandatory and required increases.

A Presidential commission composed of distinguished congressional fiscal leaders and other prominent Americans recommended this year that we adopt a new budget approach.  I am carrying out their recommendations in this year’s budget.  This budget, therefore, for the first time accurately covers all Federal expenditures and all Federal receipts, including for the first time in one budget $47 billion from the social security, Medicare, highway, and other trust funds.

The fiscal 1969 budget has expenditures of approximately $186 billion, with total estimated revenues, including the tax bill, of about $178 billion.

If the Congress enacts the tax increase, we will reduce the budget deficit by some $12 billion.  The war in Vietnam is costing us about $25 billion and we are asking for about $12 billion in taxes—­and if we get that $12 billion tax bill we will reduce the deficit from about $20 billion in 1968 to about $8 billion in 1969.