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ing needs. Second, it emphasizes the State and local needs far more than the national needs. Third, it injects the Federal Government to a far greater degree into the State systems at the expense of the Federal interest and places increasing dependence at the State level on Federal aid. Furthermore, it involves increasing Bureau responsibility at the State level. These policies are contrary to the views of the administration and, it is believed, a majority of the States. Finally, the financing of the highway program as will be required under S. 1018 involves a further unbalancing of the budget, and possibly an increase in the statutory debt limit.
Before commenting on S. 1160 I should like to remind the members of this committee of the genesis of this recommended legislation. Prompted by concern as to the importance of our highway system, the President extended to the governors' conference last summer an invitation to work out a highway program for submission to the White House which would evaluate the problem and provide a realistic solution thereof, and set forth the respective responsibilities of the Federal Government and the States. Shortly thereafter Governor Kennon, of Louisiana, appointed a special Committee of Governors to consider this problem. The Governors Committee immediately commenced to function under the chairmanship of Governor Kohler, of Wisconsin. Both of these gentlemen have appeared before this committee presenting the conclusions of their respective groups, and their endorsement of S. 1160.
Thereafter, the President appointed a committee under the chairmanship of Gen. Lucius D. Clay to study the highway problems and cooperate with the governors in developing, for the consideration of the President, a balanced program for their solution. The Clay committee availed itself of the advice of all organizations interested in the highway field and obtained much statistical data from the Bureau of Public Roads and the American Association of State Highway Officials. In my judgment there has never previously been such a comprehensive study by any group of citizens in attempting to develop a realistic highway program. The report of the Clay committee has been presented to the President and copies have been available to the Members of Congress and the public for some weeks. The President's highway message was delivered to the Congress on February 22, with a copy of the Clay report being attached to this message.
S. 1160 was drafted to implement the recommendations set forth in the President's message. I consider it a most unusual fact that the representatives chosen by the 48 governors, through Governor Kohler, concurred in the program which is now before you. Such widespread concurrence is I believe almost without precedent.
The most important objective of the legislation is the provision under which it would be possible to immediately undertake the construction and completion of an Interstate System of highways within a period of 10 years. In order to complete such a system it is essential at the outset that the program and the financing thereof be assured. It is essential that the financing be provided for and that the legislation include control of standards which would assure uniformity of necessary design characteristics throughout the Nation. S. 1160 places the major responsibility for the financing of the Interstate System and urban extensions thereof on the Federal Government because of the overall importance of this system of highways to the national economy and defense. At the same time, regular Federal aid is continued on the other systems with the exception of the reduction in the urban funds from the rates set forth in the 1954 act, which reduction is compensated by the urban road construction involved in the interstate program. The 1954 authorizations, incidentally, are the highest in our history and substantially exceed the authorizations of the 1952 act.
Under S. 1160 regular Federal aid will continue, except as above noted, and the Federal Government would in effect augment the present program by very much enlarged grants of approximately $21/2 billion per annum for 10 years to the 48 States in accordance with the deficiencies and needs in the States, in order to rectify and bring up to adequate standards the Interstate System.
The matching amounts for the Interstate System would be the same as provided in the 1954 act and would aggregate $116,666,000 per year. There will be no change whatsoever in the procedures for the construction of this Interstate System, nor in the subsequent ownership, operation, and policing of the completed facility.
The Clay committee suggested that the financing of the program be so designed that the objectives can be attained within the present tax structure and without pledging the Federal credit. The method employed is quite similar to that employed by many of the States.
Finally, I emphatically state that it is my opinion that the solution of the highway problem, and particularly the construction of the Interstate Highway System, is imperative for our economic wellbeing and expansion. The improvement of the Interstate System also satisfies the defense needs. It is interesting to note that since World War II, American industry has invested $205 billion in plant and is expected to invest $27 billion in plant in 1955.
Thus, private industry is spending for capital improvements each year approximately as much as Federal Government would be spending under this bill in 10 years for the vital Interstate Highway System. The magnitude of the task is difficult to comprehend. It is by far the largest engineering and construction program ever undertaken during peacetime. By way of comparison, the Panama Canal cost less than one-lifth of the annual expenditures contemplated on the Interstate System. This undertaking will require the closest cooperation between the 48 States and the Bureau of Public Roads over a period of 10 years. A project of this magnitude cannot be undertaken successfully on a piecemeal basis any more than it would be possible so to undertake a project such as the St. Lawrence seaway, which is a relatively small undertaking as compared to the construction of the Interstate System.
Under the 1954 act we were instructed to make an evaluation of the highway needs throughout the United States and to report upon these needs. This study and that of the Clay committee covered not only immediate highway deficiencies but the needs for the future as well. In evaluating the Interstate Highway problem the estimates are based on bringing that system up to standards which will be adequate for at least 20 years after the completion of any given section thereof. In obtaining the detailed estimates, the Bureau of Public Roads was dependent for the most part on the cooperation of the 48 States.
On the basis of these estimates and in keeping with these standards, the total requirements are estimated at $23 billion for the existing Interstate System of 37,600 miles. Provision has been made by law for the extension of the Interstate System to a total of 40,000 miles. The difference between these 2 figures, 2,400 miles, has been reserved for extension of the system in urban areas and a substantial portion, if not all, of these extensions are included in the administration bill.
For this purpose an estimated figure of $4 billion has been provided, making a total of $27 billion for the entire Interstate System and the extensions thereto. Of this $27 billion, States and local governments would be expected to contribute $2 billion, which leaves a balance of $25 billion to be provided under S. 1160.
It is estimated that there will be 81 million vehicles on the road in 1965, 40 percent more than at present. In the next 10 to 15 years our population will, it is estimated, increase about 30 million. Our roads are a vital part of our programs for commerce, trade, transportation, and defense. The basic issue before the Congress is the need to obtain in 10 years an Interstate System adequate for the next 20 to 30 years. To the extent not needed, the program involved in S. 1160 can automatically adjust and cut down. We believe the need fully exists, and that this measure is a sound way in which it can be accomplished with the minimum of uncertainty in planning and engineering.
We believe this measure represents one practical way to finance this program on a long-term basis out of gasoline and special motorvehicle fuel tax revenues. Based upon the assumption of a $48 million annual increase in the revenues from gasoline and special motor-vehicle fuel taxes, the Treasury Department estimates that the aggregate revenue from these taxes during the fiscal years 1957 through 1988 would be approximately $37 billion over and above the amount of $623 million per year needed to continue other highway aids at the present levels. Thus, it appears feasible, through the medium of the proposed Federal Highway Corporation, to pledge these revenues as provided in the bill.
Because of the acuteness of the problem, and because of the importance to our economy and defense, affirmative action is necessary. The Department of Commerce believes that S. 1160 provides a constructive and realistic foundation for a sound program.
Then the next seven pages constitute answers to your enclosure No. 1, Mr. Chairman, and I have here the answers to enclosure No. 2. This has been a considerable task and I only have one copy, sir. I will hand it to you. The other questions you all have.
Senator GORE. Without objection, the answers and questions appended to the Secretary's statement will be included in the record.
Secretary WEEKS. Mr. Chairman, I was going to, if I might, hand the Senators a copy of this table.
Senator GORE. I think they have them already.
Senator CASE. Mr. Chairman, reserving the right to object, does the request include insertion of this table which has been distributed which the Secretary was just about to add to it?
Secretary WEEKS. I should like to have it inserted.
Senator CASE. Then, Mr. Chairman, I want to point out that there is a discrepancy in the comparative figures. The comparison of the total program shows a 2-year period for 1954; 5 years for S. 1048;
and 10 years for S. 1160. Consequently, in the final column, you have 2 years of a total program under one act, 5 years under another, and 10 years under the last. Unless, in looking at this column, each reader keeps in mind that you have 2 years against 5 and against 10, it is difficult to compare
them. I think that before we get through with the study of the act, we should have a column which would compare 10 years against 10 years and not 2 against 10 or 5 against 10 or not 2 plus 5 or 7 against 10. We should have a comparison of 10 against 10.
Senator Gore. Senator Case, wouldn't you think it would be better to have a table prepared on the assumption that the 1954 act would continue as is for each of the next years, S. 1048 and S. 1160, and have a table made for each of the next 10 years that would give us a better picture?
Senator Case. That is what I am getting at. Senator GORE. Could you do that, Mr. Secretary? Secretary WEEKS. I don't see why not. I would like to point out, Mr. Chairman, that up at the top, the third line points out that the total program covers the 2-year period.
Senator Case. It states that but it doesn't give the committee what the costs would be to the States if you had a 10-year program under each of the 3 plans.
Secretary WEEKS. The comparative figures here are on a per annum basis. For example, Senator Gore, your State of Tennessee in the third column would receive Federal funds of $33,700,000, and over in the nines column, would pay in matching funds $28,400,000. Then, in the 5th column, under S. 1160, you would receive in Federal funds, $18,700,000, and in the 11th column, you would pay $15,700,000.
It gives on a per annum basis the differences there which would be about $28 million in the State of Tennessee in favor of the State.
The CHAIRMAN. Mr. Secretary, on that fifth column, isn't that $187 million instead of $48.7?
Secretary WEEKS. Tennessee? The CHAIRMAN. Yes. Secretary WEEKS. That is $18,700,000 per annum. Senator Case. That is under the 10-year program. Secretary WEEKS. Do you understand, sir? The CHAIRMAN. Yes. Senator Case. Further under the reservation of objection, that, I think, points up the difficulty of readily interpreting the column. Certainly, this is a usable table if we study it all out, but I think it would be helpful if the adjoining columns were comparisons of the annual program for each of the three proposals instead of having set in between the total program. Then, if we had a table which would compare the total programs, but on a 10-year basis, it would be more readily apparent.
Secretary WEEKS. We can have that this afternoon.
Senator GORE. Don't you think it would be better to hold the printing of this until all the tables could be printed together? Secretary WEEKS. We can have them this afternoon.
Senator MARTIN. Mr. Chairman, as I understand, what Senator Case wants is to carry these out, provided the 1954 act would be continued for 10 years, S. 1048 would be continued for 10 years and S. 1160 would be continued for 10 years. That is my understanding.
Senator Case. That is the column that shows the total program; yes. Senator MARTIN. Yes.
Senator GORE. I would like to add one additional column, the amount each State would be expected to raise, on its own part, for the primary, secondary and urban roads under the Clay report.
Secretary WEEKS. Under S. 1160 ? Senator GORE. For instance, you pointed out the case of Tennessee. There is no compilation under the effects of S. 1160 for the secondary, urban and primary road program, over and above the present program. You compiled the added State contributions under S. 1048, which would augment construction of secondary, primary and urban roads, but you make no estimate of additional expenditure on the part of the States if they have to spend that money entirely on their own without benefit of Federal matching funds. So, I would like an additional column to show the amount expected of each State under the Clay report.
Senator Case. Now, Mr. Chairman, may I ask a question for clarification? When you speak of the “Clay report,” are you speaking of its suggestion that the States and the local facilities increase their expenditures to provide the balance necessary to make up a total of $101 billion ?
Senator GORE. That is what I had in mind.
Senator CASE. That, however, is not embodied in any bill before the Congress, is it?
Senator GORE. No; no, it isn't, but I thought it would be information which the committee would like to have.
Senator Case. I think it would be very useful information, but there is no way that I know of in which the Federal Government could compel the States or the local authorities to develop a 10-year program for the completion of secondary, urban and primary systems apart from the Interstate System, unless you condition your other Federal aid upon them doing so and no bill proposes to do that.
Senator Gore. That is very true. Of course, the Federal-aid program has had two purposes, as I understand it. One is to actually
I give aid in the development of a better road system; the other is to encourage the States to redouble their own efforts to do so.
So, without objection, the tables and the second enclosure will be included in the record at this point.
(The supplement to the statement, questions and answers, submitted by Ilon. Sinclair Weeks, is as follows:)
The questions contained in the following portion of this statement are those contained in enclosure No. 1 to the letter of February 24, 1955, from the chairman of this committee to me. Since these questions cover a wide range of matters having to do with Senate bill 1160, I believe it would be appropriate to include the questions and my answers as part of this statement :
Question No. 1: With reference to the use of a corporate device for financing Federal participation in the interstate program, the following information is requested :
. A statement as to whether the proposed highway corporation is to operate under a Federal or a State charter.
Answer: The proposed Federal Highway Corporation would be a Federal corporation by act of Congress, which would constitute its charter. Title I of S. 1160 is the proposed Federal charter of the Corporation. As you know, the Government ('orporation Control Act of 1945 prohibits creation of any new Government corporation except by or pursuant to an act of Congress.
B. A statement as to whether bonds issued by the corporation are to be directly guaranteed by the faith and credit of the United States.