Mr. KILEY. No, sir; we feel that the Congress has to decide that, and the extent of the program.

Mr. CURTIS. We decide it with your advice. What is your advice? Mr. KILEY. We feel at the present time that the highway users, the payments they are making, are adequate to the trust fund.

Mr. CURTIS. I am not asking that question. I am asking a simple question.

The program now is $36 billion, when it was $25 billion. You are not asking us to see whether we can cut the program back to $25 billion. You are simply arguing about who is going to pay for the additional $10 billion to $11 billion. Is that right?

Mr. KILEY. No, sir; that is not the position.

Mr. CURTIS. Well, are you willing to have us cut back and, if so, where would you advise us that we might get this program back into the size that we thought, dollarwise?

Mr. KILEY. Do you mean to cut the program back to the available revenues in the trust fund?

Mr. CURTIS. Yes. If you are going to build a house that costs $25,000, and the architect brings in plans that are $36,000, what do you do just go out and raise the money, or do you look and see whether you can get your plans down to $25,000?

We put two guidelines on this program. One was miles and the other was dollars. Everybody seems to be talking about the miles, the ceiling on miles. This committee is concerned about the ceiling we put on on dollars.

All the administration's testimony, and yours, too, is continually talking about, "Well, we have the miles and it is going to cost us more, and, therefore, we have to raise more money."

I am asking you what about cutting the thing back to the dollar ceiling we originally imposed-$25 billion?

Mr. KILEY. We have a proposal, sir, that the highway users should pay additional taxes.

Mr. CURTIS. I understand that. But please answer my question, if you care to.

Mr. KILEY. Yes, sir; I will. I am saying that at the present time you have a certain amount of money coming in over the life of the program. That amount of money was designated to perform a certain job.

Mr. CURTIS. That is correct.

Mr. KILEY. If it is decided that no more money will be taken in, that that fund will not be augmented in any way, that the highway user tax level at the present rate will continue, then it would be a case of adjusting the program to what money is coming into the trust fund over the life of the period when no adjustments are made.

Mr. CURTIS. Don't you think that might be worth some thought? Mr. KILEY. Certainly it is worth some thought; yes, sir.

Mr. CURTIS. And the Bureau of Public Roads came in, when they figured out they saved 1,500 miles, they immediately figured out where to put in some additional mileage, and they have 13,000 to pick from, so surely in the evaluation of 40,000 there are some routes that probably could be cut back so that we could stay within our revenues. But no one is thinking in this term, or at least your testimony has not been in those terms, nor has the administration, in the terms

of how this program might be cut to our budget rather than the other way around, increasing our revenues to meet the expanded program and expanded costs.

The trucking association, in your testimony, all you are doing is saying shift the burden of the cost a certain way, but not answering the question of whether we ought to be looking at the cutting back in the program.

Mr. KILEY. There is one approach, certainly, sir, but it seems to us that simple justice dictates that in this highway tax pitcure, rather than pay lip service, let us say, to the fact that there are other benefits clearly recognized, that this be recognized in the tax program.

Even the Department of Commerce progress reports point out the monuser benefits and the fact that the highway program will ultimately be adjusted to reflect these benefits. But that is not there at the present time.

Mr. CURTIS. I might agree with you on that, but you are still talking about revenue. I am trying to talk about expenditures. I will not dwell on it further.

I will say this about the revenue aspect, and you may have heard the question I directed to administration witnesses, where I said I was trying, when we set this up, to apportion a certain amount to defense. It was fine to get the program through to talk about defense, and that is why they changed the title of it, just as your paper said, and the truckers and everybody else were willing to use defense as a method of getting the highway program through the Congress and selling it to the people of this country.

But when I try to pin this down to defense, and if there were real defense in it we could legitimately direct general funds to it, the thing disappeared in thin air. Maybe this report of 1961 will actually show some real defense in this program, but I certainly did not get any help from the truckers or anybody else in trying to pin this thing down to what part of it was defense, if any.

It all sounded so good. But now no one can tell me where the real defense is. No defense witness has come before us.

Mr. KILEY. You see, sir, that is not our question to answer. That would come from the Defense Department.

Mr. CURTIS. No, but it is your prerogative to comment on it, and I think it was, and you commented on it, very properly so. So I am trying to find out where you get the comments and you answer now that it is not your prerogative to comment on it. I say it is your prerogative.

Mr. KILEY. We think there are defense features, but we cannot delineate them. That is the point.

Mr. CURTIS. I appreciate your testimony. I wish your association would give some thought as to how we can cut this thing back. Believe me, the fiscal problems of this Federal Government are really rough.

We are going to have to cut back in some areas, and maybe the highway program will be one of them. But in my opinion if we are going to hold this line against inflation, which will hurt everybody, we better start thinking in terms of cutting programs back, not always in terms of getting additional revenue to meet the expanded ideas that we might have.

The CHAIRMAN. Mr. Byrnes will inquire, Mr. Kiley.

Mr. BYRNES. I have one further question.

Did the ATA take any position on the speedup provisions contained in the 1958 Highway Act?

Mr. KILEY. No, sir; we did not.

Mr. BYRNES. That is all, Mr. Chairman.

The CHAIRMAIN. Mr. Kiley, we thank you, sir, for coming to the committee and discussing with us the views of the American Trucking Associations.

Thank you, sir, very much.

Our next witness is Mr. Russell E. Singer.

Mr. Singer, will you identify yourself for the record by giving your full name, address, and the capacity in which you appear?

STATEMENT OF RUSSELL E. SINGER, EXECUTIVE VICE PRESIDENT, AMERICAN AUTOMOBILE ASSOCIATION; ACCOMPANIED BY KERMIT B. RYKKEN, HIGHWAY ENGINEER AND DIRECTOR OF THE HIGHWAY AND LEGISLATIVE DEPARTMENT, AMERICAN AUTOMOBILE ASSOCIATION

Mr. SINGER. I am Russell E. Singer, executive vice president of the American Automobile Association with headquarters in Washington. I am accompanied today by Mr. Kermit B. Rykken, who is our highway engineer and director of our highway and legislative department. The CHAIRMAN. You are recognized to present your statement. Mr. SINGER. Our association is a national federation of State associations and automobile clubs located in every State in the Union, with the exception of the new State of Alaska.

The record of the American Automobile Association in support of an expanded highway program to meet the growing transportation needs of our country is well documented in the proceedings of hearings before various committees of Congress over a long period of time. For years we actively sought an expanded program for construction of a National System of Interstate Highways, and through policy declarations urged that the National System of Interstate and Defense Highways, as defined in the Federal-Aid Highway Act of 1956, be completed as expeditiously as possible. We appreciate the opportunity to make this presentation to the Ways and Means Committee today.

The policy position of our association on the matters under consideration by your committee has been made known to the administration, to every Member of Congress, and to the public.

The policies involved may be briefly stated as follows:

1. Congress should provide for apportionments to the National System of Interstate and Defense Highways for fiscal years 1961 and 1962 as contemplated in the acts of 1956 and 1958.

2. We are opposed to any increase in the Federal motor fuel tax. 3. We are opposed to crediting to the highway trust fund, even temporarily, any revenue from excise taxes on passenger vehicles, their parts and accessories.

4. To meet the deficit in the highway trust fund and to assure apportionments for the National System of Interstate and Defense

Highways for fiscal years 1961 and 1962 we favor, as an interim measure only, the issuance of short-term revenue bonds.

In support of these policies, I present the following observations: The Federal-Aid Highway Act of 1956 contains a clear expression of intent on the part of Congress to continue the orderly development of the National System of Interstate and Defense Highways, both as to special financing and construction periods. Failure to provide for apportionments to the States for work on the Interstate System for the fiscal years 1961 and 1962, as contemplated in the act, would have serious consequences in many areas of our country and in important segments of our economy. This is particularly significant in view of the current problems occasioned by the steel strike. As those charged with the responsibility of carrying out the program will testify, any interruption in the orderly development of the Interstate System will result in an ultimate increase in the total cost of constructing the system. Public confidence in the Federal-aid highway program would certainly be shaken. State highway departments would be severely hampered in necessary advance acquisition of rights-of-way and the development of complex highway plans.

Records prove that highways built to Interstate System standards have a traffic fatality rate two to three times better than the national average. Engineers estimate that when the National System of Interstate and Defense Highways is completed we can expect an annual reduction of loss of life totaling 3,500.

Testimony of military authorities emphasizes the urgency of the earliest possible completion of the Interstate System.

If I may interpolate at this point, Mr. Chairman, the testimony of a very competent witness was given before the Senate Roads Subcommittee on March 23, 1955, whose name is Gen. Paul F. Yount, who was then Chief of Transportation of the Department of the Army, and I should like to read into the record what General Yount has said as to the importance of the National System of Interstate System Highways to the defense posture of our country:

Moving large numbers of people from one area to another as a civil defense measure, dispersing our defense-essential industries, and increasing the length of our highway transport lines to feed them, and moving quickly large volumes of heavy military vehicles by highway from one area to another, are factors that were not considered when our principal streets and highways were established and the abutting property developed. In the future, we must consider these factors and build into a relatively small areal highway system, characteristics that will meet the needs of all three, or we will not be prepared to cope with an attack that is possible with modern weapons. In addition to the above, and more specifically, consideration has been given by Army, Navy, and Air Force installations, key industrial areas important to the national defense, principal transportation centers, routes considered to be of strategic importance in the defense of the Untied States, and efficient highway transportation. Based on these considerations and related matters, it has been determined by the Department of Defense that the National System of Interstate Highways is the principal system of highways to serve the national defense.

That is the end of the quotation by General Yount.

The American Automobile Association reiterates its deep conviction that the financial problem involving the trust fund should be dealt with at this time on a strictly interim basis. The association is convinced that the necessary long-range reappraisal of the Federal highway program and its financing should await the studies, which

Congress directed should be made, bearing on the very fundamental question of tax equity as between the various categories of highway users and other beneficiaries of improved highways. These studies will not be completed until 1961.

The third progress report of the highway cost allocation study clearly indicates the large economic benefits accruing to nonhighway user beneficiaries such as industry, business, real estate, utilities and the general economy of the country from the National System of Interstate and Defense Highways. These findings support the expressed intent of Congress to face up to the tax equities inherent in this problem, as set forth in section 209 (b) of the Highway Revenue Act of 1956.

We sincerely hope that in 1961 the various committees of both Houses of Congress having any responsibility for Federal-aid highway legislation--perhaps in joint sessions-will have very thorough hearings to go into all phases of the program-financing, the tax schedules as between highway users and nonuser beneficiaries, construction plans, etc. This is what the motoring public is entitled to under the policy declaration by Congress in the act of 1956.

These equities can only be determined when Congress and all interested parties are in possession of the facts.

Two proposals have been advanced which involve either a revision in the existing schedule of taxes dedicated to the highway trust fund or the transfer of certain automotive excise taxes to the trust fund which are not presently used for highway purposes.

To change the tax schedule at this time would be an unfortunate prejudgment of the results of the section 210 study. While the proposal advanced for an increase of 12 cents per gallon in the Federal motor fuel tax has been called a temporary increase, the long history of Federal automotive excise taxes clearly indicates that such temporary taxes have a way of becoming rather permanent. To assess the highway users of the country an additional $800 million to $1 billion annually through a tax increase could have the effect of denying to the highway user the thorough appraisal of the equities involved to which he is entitled.

The proposal to transfer certain additional automotive excise taxes to the trust fund is also a prejudgment of the results of the studies now going on. Here again, it seems all to evident that once such a transfer is made to the highway trust fund through statutory dedication, the possibility of equitable tax adjustment based on facts from the 210 study is seriously jeopardized. Once these excise tax revenues are dedicated to the trust fund they are likely to be frozen there.This would have the effect of keeping the highway trust fund dependent solely on revenues from Federal automotive excise taxes, a policy which we believe is neither just nor equitable.

Frankly, it is our hope that when your committee takes up the study for a broader and more equitable tax base to support the Government, and particularly as regards various excise taxes on essential commodities, you will find it possible to give relief from some of the heavy automotive taxes. That is a further reason why we urge no increases or freezing of taxes to the highway trust fund.

We have already urged that the Congress repeal section 111 of the Federal-Aid Highway Act of 1956 in the application of which large