IMPROVING THE INTERNATIONAL MONETARY SYSTEM In 1966, significant progress was made toward a better international monetary system. Through close consultation and cooperation among the financial authorities of major countries, temporary strains were met promptly and effectively. Two large forward steps were taken on the road to international monetary reform: wide consensus was reached on basic principles for the deliberate creation of additional reserve assets; and the negotiations advanced to a second stage in which all members of the International Monetary Fund are participating. An even greater effort must be made in the coming year to improve our monetary system. In particular, I urge that -all countries participate in the continuing task of strengthening -full agreement be reached on a constructive contingency plan HELPING THE DISADVANTAGED The United States is the first large nation in the history of the world wealthy enough to end poverty within its borders. There are many fronts in the War on Poverty. We are moving forward on them all. • There must be full employment so that those qualified and able to work can find jobs. . . The unemployment rate last year was the lowest in 13 years. • Those not now fully qualified must be given the education and training, the health and guidance services which will enable them to make their full contribution to society. . . . We have greatly increased our aid to education and enlarged our training programs, and we will expand them further. For those who will be unable to earn adequate incomes, there must be help-most of all for the benefit of children, whose misfortune to be born poor must not deprive them of future opportunity. . . . We have increased our income support, and we will increase it further. Wherever the poor and disadvantaged are concentrated, intensive and coordinated programs to break the cycle of deprivation and dependency must continue and be reinforced. . . . We have instituted these programs in hundreds of cities and rural areas; we are expanding them and designing others. INCOME GUARANTEES Completely new proposals for guaranteeing minimum incomes are now under discussion. They range from a "negative income tax" to a complete restructuring of Public Assistance to a program of residual public employment for all who lack private jobs. Their advocates include some of the sturdiest defenders of free enterprise. These plans may or may not prove to be practicable at any time. And they are almost surely beyond our means at this time. But we must examine any plan, however unconventional, which could promise a major advance. I intend to establish a commission of leading Americans to examine the many proposals that have been put forward, reviewing their merits and disadvantages, and reporting in 2 years to me and the American people. PUBLIC ASSISTANCE Our system of public assistance is now 30 years old and has obvious faults. The standards of need set by many States are unrealistically low; benefits are further restricted by excessively stringent eligibility conditions. In some respects the system perpetuates dependency. 1. State standards of need are miserably low. In 18 States a family of 4 is presumed able to manage for a month on $45 a person or less. And in many States, actual payments average far below their own standards of need. It is time to raise payments toward more acceptable levels. As a first step, I ask the Congress to require that each State's payments at least meet its own definition of need; and that its definition should be kept up to date annually as conditions change. 2. With minor exceptions, payments under public assistance are reduced dollar for dollar of earnings by the recipient, removing any incentive to accept part-time work. We should encourage self-help, not penalize it. It is time to put an end to this 100 percent tax on the earnings of those on public assistance. I shall therefore ask Congress to enact payment formulas which will permit those on assistance to keep some part of what they may earn, without loss of payments. 3. Many recipients of public assistance are capable of receiving training which would ultimately make them self-supporting. I therefore urge the Congress to make permanent the Unemployed Parent and Community Work and Training programs associated with Aid to Families with Dependent Children (AFDC), and to require all States receiving Federal support under AFDC to cooperate in making Community Work and Training available for the unemployed parents of dependent children. TRAINING AND EMPLOYMENT The coexistence of job vacancies and idle workers unable to fill them represents a bitter human tragedy and an inexcusable economic waste. One of society's most creative acts is the training of the unemployed, the underemployed, or the formerly unemployable to fill those vacancies. A dynamic economy demands new and changing skills. By enabling workers to acquire those skills, we open opportunities for individual development and self-fulfillment. And we make possible higher production without inflationary pressures. I shall ask the Congress for funds to support a new and special effort to train and find jobs for the disadvantaged who live in urban ghettos. I shall also propose legislation to improve the effectiveness of the Federal-State employment service. SOCIAL SECURITY Millions of aged still live in poverty. Millions of younger Americans are willing to pay for more adequate retirement benefits in the future. I ask the Congress to approve an over-all 20 percent increase in our Social Security program. We can increase benefits for all Social Security beneficiaries by at least 15 percent, raise the minimum benefit by 59 percent to $70 a month, assure workers with 25 years of coverage at least $100 a month, extend Medical Insurance to disabled beneficiaries, and allow larger earnings without loss of benefits. UNEMPLOYMENT INSURANCE Our system of unemployment insurance was created in a world of massive unemployment. The needs of a high employment economy are different. Today, when jobs are available, the jobless who exhaust their benefits typically need training, guidance, or other supportive services. Therefore, I am asking the Congress to consider legislation to provide such services in conjunction with extended benefits to the long-term unemployed, to extend the protection of the system to additional workers, to establish more uniformly adequate benefits, and to correct abuses. CITIES AND HOUSING The American city is not obsolete; it is still a great engine for economic and social progress. But cities are in trouble, threatened by congestion, pollution, crime, poverty, racial tension, slums, and blight. Yesterday's rural poor have been moving to the city just as many of the jobs they seek and need have been moving to the suburbs. Inadequate transportation and discrimination in housing make it difficult for them to follow the jobs; and deficiencies of education, health, and skills compound their disadvantages. Most cities cannot afford the massive expenditures necessary to solve these problems. The flight of higher income families and businesses to the suburbs erodes sources of revenue for the cities, even as expenditure demands escalate. Inflexible city limits have created a hodgepodge of local taxing jurisdictions, often dividing the tax base from the need. The cities cannot collect for the many benefits they supply to residents of the suburbs. The problems of the cities flow across irrelevant boundaries established by historical accident. So solutions must draw on the resources and imagination of a larger area. Our efforts have been aimed to encourage a metropolitan approach to metropolitan problems. We must also find ways to enlist more fully the resources and imagination of private enterprise in the great task of restoring our cities. I have just appointed a Commission, under the chairmanship of Senator Paul H. Douglas, to work with the Department of Housing and Urban Development to examine problems of codes, zoning, taxation, and development standards and to recommend ways to increase the supply of low-cost housing. I am convinced that this study can make a major contribution to the solution of urban problems. Last year, the Congress enacted the pathbreaking Model Cities legislation. The Federal Government will help cities to focus all available programs on their needs—eventually to overwhelm the problems that have heretofore overwhelmed the cities. More than 70 cities will have completed their plans and be eligible to start receiving assistance in 1968. Federal aid for water and sewer projects, open land conservation, and urban mass transportation is encouraging a more coordinated approach to metropolitan problems. I seek increased appropriations for all of these programs. And I shall seek authorization and resources for a greatly expanded program of research on urban problems. Growth in the number and incomes of American families will require us to build about 2 million new houses a year for the next decade, most of them in and around cities. Last year, housing bore a disproportionate part of the burden of needed restraint. But we are now moving into a period of renewed homebuilding. I look for construction to rise briskly during 1967. Federal programs for fiscal 1968 will assist in construction or renovation of 165,000 housing units for the urban poor, the elderly, and the handicapped. The Rent Supplement program will contribute to this goal. This year will be a brightening one for the housing industry; it can also be a landmark year in the progress and evolution of our cities. EDUCATION AND HEALTH Individually and collectively, Americans have insatiable appetites for more education and better health. Education and health contribute both to individual well-being and to the Nation's productivity. But far too many of our urban and rural poor are denied adequate access to either. The efficiency of our methods of education and of providing medical care can and should be strengthened. History will record these years as the time when this Nation awoke to its needs and its limitations-in education and health. The Elementary and Secondary Education Act, Head Start, the Teachers Corps, Medicare, Medicaid, and the Partnership in Health will be landmarks in our social and economic development. I shall propose -an expanded Head Start program; a Follow-Through program in the early years of school; and the opening of other new educational opportunities for children; --both legislative and administrative changes to accelerate research and development on more efficient and effective ways of providing health resources; -an expanded child health program, including early diagnosis and treatment, a pilot program of dental care, and the training of additional health personnel to provide services to children. ABATING POLLUTION A polluted environment erodes our health and well-being. It diminishes individual vitality; it is costly to industry and agriculture; it has |