But, our Nation has serious problems. Inflation and unemployment are unacceptably high. The world oil market is increasingly tight. There are trouble spots throughout the world, and 52 American hostages are being held in Iran against international law and against every precept of human affairs. However, I firmly believe that, as a result of the progress made in so many domestic and international areas over the past four years, our Nation is stronger, wealthier, more compassionate and freer than it was four years ago. I am proud of that fact. And I believe the Congress should be proud as well, for so much of what has been accomplished over the past four years has been due to the hard work, insights and cooperation of Congress. I applaud the Congress for its efforts and its achievements. In this State of the Union Message I want to recount the achievements and progress of the last four years and to offer recommendations to the Congress for this year. While my term as President will end before the 97th Congress begins its work in earnest, I hope that my recommendations will serve as a guide for the direction this country should take so we build on the record of the past four years. RECORD OF PROGRESS When I took office, our Nation faced a number of serious domestic and international problems: --no national energy policy existed, and our dependence on foreign oil was rapidly increasing; --public trust in the integrity and openness of the government was low; --the Federal government was operating inefficiently in administering essential programs and policies; --major social problems were being ignored or poorly addressed by the Federal government; --our defense posture was declining as a result of a defense budget which was continuously shrinking in real terms; --the strength of the NATO Alliance needed to be bolstered; --tensions between Israel and Egypt threatened another Middle East war; and --America's resolve to oppose human rights violations was under serious question. Over the past 48 months, clear progress has been made in solving the challenges we found in January of 1977: --almost all of our comprehensive energy program have been enacted, and the Department of Energy has been established to administer the program; confidence in the government's integrity has been restored, and respect for the government's openness and fairness has been renewed; --the government has been made more effective and efficient: the Civil Service system was completely reformed for the first time this century; --14 reorganization initiatives have been proposed to the Congress, approved, and implemented; --two new Cabinet departments have been created to consolidate and streamline the government's handling of energy and education problems; --inspectors general have been placed in each Cabinet department to combat fraud, waste and other abuses;