ent program, and use of general funds have been made, and others will certainly follow but, assuredly, the proposed increase is not proper nor can it be justified.

Mr. Chairman, I again express my sincere appreciation for this opportunity to appear before the Committee on Ways and Means. I recognize that you have a difficult problem before you, and as a member of the House Committee on Public Works I stand ready to be of whatever service I can in finding an appropriate solution to it.

The CHAIRMAN. Thank you, Mr. Taylor for giving us the benefit of your views.

The CHAIRMAN. We will now hear from our colleague, the Honorable Albert Rains, from the State of Alabama. We are happy to welcome you, Mr. Rains.

STATEMENT OF REPRESENTATIVE ALBERT RAINS, OF ALABAMA Mr. RAINS. Thank you, Mr. Chairman.

Mr. Chairman, I am opposed to the President's request for a 12-cent-per-gallon increase in the Federal gasoline tax for the next 2 years, and I am also opposed to the graduated tax on gasoline as represented by H.R. 7969.

Both of these proposals have been described as temporary taxes, but the fact is that we have rarely, if ever, imposed a temporary tax. The luxury taxes levied in wartime were temporary taxes which came to stay. Admissions taxes to theaters and sports events were supposed to be temporary. Hundreds of sales taxes levied in the respective States were designed as temporary-to bridge the gap or to meet some emergency need. But most often we find when the time comes for such a tax to expire the emergency which prompted it either has continued or a new crisis has arisen to require revenue produced by the temporary tax.

In the case of the Interstate Highway program, I, for one, did not anticipate paying for this construction as it is done, but rather over a period of time, just as most of us pay for our homes. And I subscribe to the view that before we consider levying a gasoline tax we should first transfer to the highway trust fund the estimated $1.5 billion in automobile and excise taxes which go into the Federal Treasury and are used for other purposes.

In the 1958 fiscal year highway-related tax collections by the Federal Government totaled $3.6 billion. But only $2.1 billion was earmarked for highway purposes. The remaining $1.5 billion, or 42 percent of the total amount collected, was paid into the Treasury's general fund for other Federal activities that have no relation to highways.

It seems to me that if we must pay for the highway construction at a faster rate, then Congress should earmark for that purpose taxes already being paid by highway users, and not place any higher taxes on our motorists. It is estimated that 75 percent of all American automobiles are used to transport people to and from places of employment. For millions of American motorists an increase in Federal taxes on gasoline might be considered in the same light as an increase in the transportation taxes, most of which, we may recall, were originally offered as temporary measures.

I would like for the committee to note the high rate of the gasoline tax levied by many of our States. We in Alabama pay a State gasoline tax of 7 cents per gallon. This is the highest rate among the States, but Alabama is not the only State with such a gasoline tax. A 7-cent-per-gallon tax is also levied by Florida, Kentucky, Louisiana, Maine, Nebraska, Mississippi, North Carolina, South Carolina, and Tennessee. Certainly our States cannot remove their gasoline taxes, for they are sorely pressed for revenue from all sides, and their participation in the highway program requires what revenue is obtained by the gasoline tax.

Mr. Chairman, there has been no convincing evidence that we need to pay for this vast highway program immediately, and certainly as long as $1.5 billion from related tax revenues is being diverted for other Federal projects I cannot go along with any move to impose higher gasoline taxes on our citizens.

The CHAIRMAN. Thank you, Mr. Rains, for coming to us and giving us your views on this subject.

Mr. RAINS. Thank you, Mr. Chairman.

The CHAIRMAN. We will now hear from our colleague, the Honorable R. Walter Riehlman from the State of New York. We are happy to welcome you, Mr. Riehlman.

STATEMENT OF REPRESENTATIVE R. WALTER RIEHLMAN, OF NEW YORK

Mr. RIEHLMAN. Thank you, Mr. Chairman.

I appreciate the opportunity to contribute my views to the study presently underway in the Ways and Means Committee concerning the crisis that exists with respect to financing the Interstate Highway System. It is a crisis that bears directly on the lives and livelihoods of countless people across the country. The breakdown of this program will have an indirect, but equally important, bearing on the lives of a great many others. Of no small importance, I am sure you will agree, is the fact that curtailment at this time will materially deprive this Nation of a segment of its transportation network that is of vital importance to its growing population and expanding

economy.

The Federal-aid highway program has for some years been, to the great majority of the American people, a thoroughly acceptable and respectable undertaking. It is one of the few Federal-aid programs designed to operate on a pay-as-you-go basis. There has been some extravagance and waste, as might be expected in a program of such magnitude, but the overall effect has been one of which Congress and the American people can be justifiably proud. I therefore urge, in the strongest possible way, that the committee make every effort to arrive at an economically sound solution permitting the continuation of this worthwhile program.

The economic factors contributing to the present situation are quite clear. Due to the financial position of the highway trust fund, the Secretary of Commerce has informed us that unless additional funds are made available by the Congress, it will be necessary to completely forgo any apportionment of interest funds for fiscal year 1961 and the apportionment during fiscal year 1962 would amount to only

$500 million. So, the problem confronting Congress, although simple on its face, is difficult of solution. To continue the program, we must provide more money. Several alternatives are before the committee. The committee is faced with the problem of choosing that alternative which is in the best interest of the country, both from the standpoint of continuing the interstate program and from the standpoint of consistency with economy and responsibilty in government.

It appears to me that the problem lends itself to one of four broad areas of solution: First, do nothing and allow the program to ride out a barren fiscal year 1961 and part of 1962 and then resume on a slightly reduced level; second, increase revenues to support the program at its present and projected levels; third, continue the program at its present and projected levels by making up deficits from the general fund of the Treasury or by issuing special bonds; and fourth, establish a minimum annual level of expenditure and maintain it by borrowing from the general fund in lean years and and making repayments from the highway trust fund in good years.

It is my firm belief that the first three of these solutions are less desirable than the fourth. If we do nothing and let the interstate program weather as best it can the present financial storm, we will seriously disrupt the programs that are now either in the planning stage or underway in the States. It is my understanding that interstate programs will come to a substantial halt in most parts of the country sometime in the fall of 1959, should Congress decide not to act. When funds once again become available, the job of organizing the necessary personnel and equipment to renew the program will represent a time-consuming and costly process. The fact that this program is in the best interests of the Nation, plus the uneconomical aspects of curtailment, plus the obvious effect on the many people who depend on this program for their livelihood, certainly places this first solution in an unfavorable light.

The second alternative is embodied in the President's request for a 111⁄2 cent per gallon increase in the gasoline tax. The prospect of a further increase in taxes has certainly met with less-than-favorable response in most parts of the country, particularly among my own constituents in the 35th District of New York. The fact that the Federal Government has authorized and planned expenditures that are far beyond actual and anticipated trust fund receipts certainly, in my opinion, invalidates any justification for demanding increased revenues from the taxpayers. The taxpayer should not be made the whipping-boy when there is another solution available that is, economically speaking, equally sound.

The third alternative, that of taking the program off a pay-as-yougo basis and either financing it from the general fund or issuing special bonds, is, in my opinion, the least desirable of those solutions permitting continuation of the program. In a nutshell, this would result in supporting the Federal-aid highway program through deficit financing. The net result will be that one more otherwise worthwhile program will, year after year, make its contribution to an increasing national debt. At a time when there is so much public concern over inflation and the manner in which our fiscal system is operated, I feel that a course of action indicating our willingness to surrender one more program to the permanent expediency of deficit financing would

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serve as a crushing blow to the public's confidence in its elected representatives.

I believe the fourth alternative is, in all respects, the soundest approach to the problem. This approach is embodied in a bill, H.R. 7293, which I introduced earlier in this session. This bill authorizes a minimum apportionment of $1.4 billion for the Interstate System each year beginning with fiscal 1961. It authorizes the highway trust fund to borrow from the general fund during the years 1960, 1961, and 1962 when there will be a storage of funds under present legislation. The highway trust fund would then reimburse the general fund of the Treasury immediately after 1962 when it is estimated that income will exceed $1.4 billion. It would maintain authorizations for primary, secondary and urban highways at a rate of between $875 million and $1 million as provided by present law. This represent a tightening of the belt but would, in no way, interfere with the ultimate objectives of the interstate program. It would, at most, extend the program a few years beyond the present expectation. In providing an even distribution of funds over the length of the interstate program, it would allow State highway departments to plan upon a dependable apportionment every year for interstate construction. It is estimated that borrowings from the Treasury will be held. to the following levels: $241 million in 1960, $757 million in 1961, and $662 million in 1962.

Granted, this program will not be self-supporting during the first few years, but the end result will be one of financial solvency. By including in this bill the mandatory requirement that the Treasury will be repaid from the trust fund during those years when receipts exceed $1.4 billion, the public will be assured of congressional willingness to restrict spending to income. In the absence of any indebtedness to the general fund, the apportionment for any given year could exceed $1.4 billion by the amount that trust fund receipts exceeded $1.4 billion.

Let me emphasize that my proposal will not cut back the overall highway program. It would establish a minimum annual level of expenditure that could only be exceeded on a pay-as-you-go basis.

I urge that the committee give fullest consideration to the aboveoutlined proposal. It represents, in my estimation, a constructive and realistic solution to a critical problem.

The CHAIRMAN. Thank you, Mr. Riehlman for coming to us and giving us your views on this subject.

Mr. RIEHLMAN. Thank you, Mr. Chairman.

The CHAIRMAN. Our next witness this morning is our colleague from Kansas, Hon. Wint Smith.

Mr. Smith, we are pleased to have you before the committee. You are recognized to proceed.

STATEMENT OF REPRESENTATIVE WINT SMITH, OF KANSAS

Mr. SMITH. Mr. Chairman and members of the committee, I represent the Sixth Congressional District in the State of Kansas, and I appear here this morning in opposition to an increase in the Federal gasoline taxes.

There are many reasons why I oppose this measure, but the most cogent reason that I can think of is that it is a further encroachment

on the part of the Federal Government into an area that we have always felt basically belonged to the State.

It is not a question of whether we need good roads for national defense or for the convenience of the traveling public; the question is solely how will these roads be paid for?

Ever since I have been here in the Congress-for the past 12 years--I have never ceased to marvel why it is that we in the Congress put so much stress on building roads and bridges throughout the world and then start taxing our own people at an exorbitant rate to finance their roads.

I am sure that everyone knows that the present construction program needs additional funds, but recently-in fact, this week-the Congress authorized $312 billion for foreign aid. To take even a good substantial share of this foreign aid authorization would help out a great deal in keeping our own U.S. road program going. No one ever suggests this.

Out in Kansas we have a law which compels the State of Kansas, when they levy a gasoline tax, that these taxes must be used solely for the benefit of Kansas roads. Kansas has the second largest mileage of roads in the United States. Texas is the only State that exceeds our mileage. To compel the people of Kansas to pay an additional cent or a cent and a half in taxes is, to my mind, unjust, and it should not come to pass.

I am well aware that some States use gasoline-tax money for other purposes than roadbuilding but, I again repeat, Kansas uses its gasoline-tax money only for road purposes. It has been thought for many years that the Federal Government would not encroach in this field of taxation; namely, the taking away of sources of revenue from the State. There is only so much money that can be taken on any product by taxation, and certainly we are reaching the saturation point in regard to this matter.

If the Federal Government would use the excise taxes that it gets on autos, trucks, and other segments of the motor-carrier industry, no one would object. But this idea that the Federal Government can continue to dip into gasoline taxes is wrong in principle.

I also want to tell this committee that I was requested to speak on behalf of the Kansas State Farm Bureau by Mr. W. I. Boone, president, at Manhattan, Kans. He authorized me to state that the Kansas Farm Bureau is unalterably opposed to any increase in the Federal gasoline tax.

The Kansas Farm Bureau is a sound, conservative organization, and their recommendations carry great weight throughout the State of Kansas on matters of general policy outside of the field of farm

matters.

The people of the district I represent believe in adequate roads, but they cannot understand why it is that when the Federal Government gets more money from the taxes it collects on gasoline, vehicles, tires, and oil than it pays out for Federal Government's share of road programs that the people should be taxed another cent or cent and a half gas tax.

Certainly this Ways and Means Committee can find the necessary funds elsewhere. And, to again repeat, $312 billion in foreign aid has not been spent, and there is also some $5 billion or $6 billion of unallocated funds in the pipelines that has not been spent.