During the war, nearly 5 million men were rejected for military service because of physical or mental defects which in many cases might have been prevented or corrected.  This is shocking evidence that large sections of the population are at substandard levels of health.  The need for a program that will give everyone opportunity for medical care is obvious.  Nor can there be any serious doubt of the Government’s responsibility for helping in this human and social problem.

The comprehensive health program which I recommended on November 19, 1945, will require substantial additions to the Social Security System and, in conjunction with other changes that need to be made, will require further consideration of the financial basis for social security.  The system of prepaid medical care which I have recommended is expected eventually to require amounts equivalent to 4 percent of earnings up to $3,600 a year, which is about the average of present expenditures by individuals for medical care.  The pooling of medical costs, under a plan which permits each individual to make a free choice of doctor and hospital, would assure that individuals receive adequate treatment and hospitalization when they are faced with emergencies for which they cannot budget individually.  In addition, I recommended insurance benefits to replace part of the earnings lost through temporary sickness and permanent disability.

Even without these proposed major additions, it would now be time to undertake a thorough reconsideration of our social security laws.  The structure should be expanded and liberalized.  Provision should be made for extending coverage credit to veterans for the period of their service in the armed forces.  In the financial provisions we must reconcile the actuarial needs of social security, including health insurance, with the requirements of a revenue system that is designed to promote a high level of consumption and full employment.

(k) Education.

Although the major responsibility for financing education rests with the States, some assistance has long been given by the Federal Government.  Further assistance is desirable and essential.  There are many areas and some whole States where good schools cannot be provided without imposing an undue local tax burden on the citizens.  It is essential to provide adequate elementary and secondary schools everywhere, and additional educational opportunities for large numbers of people beyond the secondary level.  Accordingly, I repeat the proposal of last year’s Budget Message that the Federal Government provide financial aid to assist the States in assuring more nearly equal opportunities for a good education.  The proposed Federal grants for current educational expenditures should be made for the purpose of improving the educational system where improvement is most needed.  They should not be used to replace existing non-Federal expenditures, or even to restore merely the situation which existed before the war.