Nation: THE LAST MESSAGE-AND ADIEU

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Johnson's mood was solemn as he spoke of the war. "I regret more than any of you know," he said, "that it has not been possible to restore peace to South Viet Nam." But he scorned critics who have contended that Viet Nam has drained needed funds from butter for guns. "We have been able in the last five years to increase our commitments for such things as health and education from $30 billion in 1964 to $68 billion in the coming fiscal year. That's more than it's ever been increased in the 188 years of this Republic, notwithstanding Viet Nam." Increases in social-welfare spending were just what most congressional Democrats wanted to hear about.

Broad and Deep. The U.S., said Johnson, continues to enjoy an unequalled economic boom. "Our prosperity is broad and deep," he said. "It's brought record profits, the highest in our history, record wages. Our gross national product has grown more in the last five years than in any other period in our nation's history." The G.N.P. was $589,200,000,000 when Johnson took office; for calendar 1968 it is $861 billion. Unexpectedly, he also announced that the U.S. has achieved an international balance of payments surplus for the first time since 1957, which should add new strength to the dollar (see BUSINESS).

In a separate message to Congress, Johnson proposed a budget for the fiscal year starting July 1 that comes to $195,300,000,000, an $11.6 billion jump from the present year's estimated total. The nation can afford this new federal spending, Johnson explained, precisely because it is so prosperous. He predicted budget surpluses of $2.4 billion for fiscal 1969 and $3.4 billion for fiscal 1970. Total defense outlays will creep up only $500 million to $81.5 billion, and the proportion going for Viet Nam will drop, for the first time, from 35.5% to 31.2%—partly because the costly bombing of North Viet Nam has been cut back sharply, partly because major base construction is now nearly complete. Administration officials were careful to say that the cut signified no lessening of the U.S. war effort.

Campaign Commitments. Johnson's other budget proposals for fiscal 1970 include ending the distinction between first-class mail and airmail, since much long-distance mail now goes by air anyway; the new flat rate would be 7¢ an ounce. Congressional salaries would go from $30,000 to $42,500 a year, those of Cabinet members from $35,000 to $60,000. (Last week the Congress approved a 100% salary boost for the President, to $200,000.) Johnson requested no new money for the U.S. supersonic transport and suggested cuts of $300 million in space spending, $540 million in farm-price supports and $120 million in foreign aid. He asked for an extra $743 million for the Department of Housing and Urban Development, mainly for its model-cities and housing-subsidy programs.