The ultimate benefit which veterans receive from the loan guarantee provisions of the Servicemen’s Readjustment Act depends largely on the success of our stabilization program in restraining building costs and real estate values.  Under the revised procedure contained in recent amendments, the administrative workload will be minimized by the almost complete transfer of authority for approving the guarantees to private lending agencies and private appraisers designated by the Veterans Administration.  This authority carries with it the responsibility for restricting the guarantees to loans on reasonably valued properties.  Costs of the program, other than for administration, are estimated at 21 million dollars in the fiscal year 1947.

Pensions for veterans will require expenditures estimated at 1,748 million dollars for the fiscal year 1947.  Two-thirds of this amount will be received by veterans of the war which we have just won.  This figure includes 55 million dollars of increased pensions for student-veterans in our vocational rehabilitation program.  In addition, 170 million dollars will be expended in transfers to the National Service Life Insurance fund from general and special accounts.

Expenditures under the appropriation for salaries and expenses of the Veterans Administration are estimated at 528 million dollars in the fiscal year 1947.  This includes 260 million dollars for medical care and the operation of some 103,000 hospital and domiciliary beds.

A separate appropriation for hospital and domiciliary facilities, additional to the total for veterans’ pensions and benefits, covers construction that will provide some 13,000 hospital beds as part of the 500-million dollar hospital construction program already authorized by the Congress.  The estimated expenditures of 130 million dollars for this purpose are classified in the Budget as part of the general public works program for the next fiscal year.

(b) For interest.

Interest payments on the public debt are estimated at 5 billion dollars in the fiscal year 1947, an increase of 250 million dollars from the revised estimate for the current fiscal year.  This increase reflects chiefly payment of interest on additions to the debt this year.  Assuming continuance of present interest rates, the Government’s interest bill is now reaching the probable postwar level.

(c) For refunds.

An estimated total of 1,585 million dollars of refunds will be paid to individuals and corporations during the fiscal year 1947.  Slightly over half of this amount, or 800 million dollars, will be accessory to the simplified pay-as-you-go method of tax collection, and will be the result of overwithholding and over declaration of expected income.  Most of the remainder will arise from loss and excess-profits credit carrybacks, recomputed amortization on war plants, and special relief from the excess profits tax.

This category of expenditures is thus losing gradually its “aftermath-of-war” character, and by the succeeding year will reflect almost entirely the normal operation of loss carry-backs and current tax collection.