Evening star., 1961-02-02
Text Of President Kennedys Economic Message


A particularly high priority will
be assigned to projects located
in areas Of labor surplus.
(C) / have today instructed
the Secretary Of Commerce to
make. available to the States
Immediately the entire balance
Of Federal-aid highway funds
scheduled for this fiscal year.
This acceleration of the ayaila-
bilty of $724 million is a first
step in speeding up the highway
program and getting more prof.
ects under construction and
more men at work this year.
The Secretary will urge the
States to place under contract
as soon as spossible all those
projects which are currently: In
the final stages of planning.
In addition, have asked
the Secretary of Commerce to
recommend to me, as part Of
the inventory Of approved
construction projects, called
for earlier in this message,
means Of increasing the flow
Of Federal highway funds into
actual new construction II
economic conditions require
such action, $50 =,
IL. GOVERNMENT PROCE-
DURES IN LABOR SUR.
PLUS AREAS. 49,
A principal purpose of the
proposed Area Redevelopment
Act is to create new jobs in
chronic labor surplus areas kx
bringing in new private in.
dustrieS. 1t would be anoma-
lous for the Government to
urge these locations on private
industry while ignoring these
areas in the location Of its own
activities. Agencies Of the Feds
eral Government, in locating
new facilities or deciding upon
the use of existing facilities.
are directed to give, every rea-
sonable preference to labor
surplus areas. ,
And I have today sent a di-
rectiVe to the Secretary OF De-
fenSe, the Secretary Of EabUS,
and the General Services Id
ministratiOn requesting pfOrn6E
steps to improve the E1aeIiin-
cry by which Federal contracts
can be channeled to firAS To-
Gated In labor surplus areas.
I have emphasized that the
solution to our economic prob.
lem requires "a program that
goes well beyond anti-reces-
sion measures, important as
these are to the relief Of dis
tresS and the reversal of
economic decline. Equally i'm
portant are measures for the
longer pull to restore our
economy to its full potential
and to accelerate economic
growth. Fortunately, the meas
ures to overcome recession, to
take up the slack, and to speed
growth all reinforce each other.
Today. most industries have
the facilities to produce well
above current levels. They lack
only customers. As Nation,
we lose not only $50 to $40
billion Of production per year.
We also lose the vital in
centives whb capacity opera
ton gives fdr expansion and
modernizatior1 of plant and
equipment. The measures I
have proposed to reduce un-
employment and stimulate
markets will help to restore
these incentives for economic
growth.
/. SPECIAL TAX INCENTIVES
TO INVESTMENT
Expansion and moderniza-
tion Of the Nations productive
plant is essential to accelerate
economic growth and to i'm
prove the international COM
petitive position Of American
industry. Embodying modern
research and technology in new
facilities will advance produc-
tivity. reduce costs, and market
new products. Moreover, an
early stimulus to business In
vestment will promote re-
covery and increase employ
ment. ~.~
Among the reforms Of the
Federal tax system which I
expect to propose at a later
date is a modification Of the
income tax laws to provide ad-
ditiOnal incentives for invest
ment in plant and equipment.
To avoid a net revenue loss, 1
will also recommend measures
to remove several unwarranted
special tax benefits, and to inn
prove tax compliance and ad-
ministration. It should be
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