gracious remarks to make about the chairman and the members of the committee, but I was afraid it would come out of my 5 minutes, and I wouldn't have the time to do it. But I feel quite sure, Mr. Chairman, that the bonds will be very salable.

The CHAIRMAN. We would always be lenient with our friend and not call time on him.

I am interested in this idea of the bond issue. I asked you the questions to get your reaction.

Thank you.

Mr. Utt will inquire.

Mr. UTT. Mr. Bass, you made reference two or three times to the poor planning of the program. My suggestion would be that the program was fairly well planned, but that the Congress in frantic panic last year voted an acceleration of the program which caused us to be in our present situation. I think Congress must assume part of the responsibility for the position we are in and not only the highway commissioners.

Mr. Bass. I think the Congress has to assume almost total responsibility for the planning of it, because that was our program. But I would like for the record to show that I did not say it was poorly planned. The statement I made was that it was not as well planned as we were given to understand. That does not mean that it was poorly planned. I think it was well planned. But the financing was not as well planned as I was given to understand at the time that I voted for the highway program.

But I do not mean to indicate that it was poorly planned. I think it was well planned. But not as well planned in the financing of it as we have seen it should have been at that time.

Mr. UTT. Don't you think that if we had not accelerated the program, that probably we would not be in the financial difficulty we are in today?

Mr. BASS. That is true. That is the reason that I recommend the issuance of these bonds to be paid out of the user taxes to take up the increase in the stepped-up program, the increased costs, the immediate costs or temporary costs.

Mr. UTT. That is all, Mr. Chairman.

The CHAIRMAN. Are there any further questions?

Mr. HARRISON. That was not one of the inflationary bills that was vetoed by the President, however.

Mr. BASS. I did not understand the gentleman.

Mr. HARRISON. I believe that bill was signed by the President. Mr. BASS. Yes. That was not one of the inflationary bills, you are correct, that was vetoed.

The CHAIRMAN. Thank you, Mr. Bass.

Mr. BASS. Thank you, Mr. Chairman.

The CHAIRMAN. Our next witness is our colleague from Florida, the Honorable Robert Sikes.

STATEMENT OF REPRESENTATIVE ROBERT L. F. SIKES, OF FLORIDA

Mr. SIKES. Mr. Chairman, I feel that there should not be an increase in Federal taxes on gasoline at this time, and that if necessary the road program should be modified or slowed in order that we not find it essential to increase taxes.

With the permission of the chairman and the committee, I will file my statement.

The CHAIRMAN. Without objection, your statement will be received in the record.

(Mr. Sikes' statement follows:)

STATEMENT BY CONGRESSMAN ROBERT L. F. SIKES, DEMOCRAT, OF FLORIDA

Mr. Chairman, I am opposed to any increase in the Federal gasoline tax at this time and I would like to cite to you some of my reasons for this opposition. As you know, gasoline is already bearing a tax burden far out of line with that imposed on other automotive products or any other comparable product in the whole Nation. In Florida, the gasoline tax rate is now 7 cents per gallon, exclusive of local taxes. Adding the present 3-cent Federal tax brings the combined State-Federal levy to 10 cents a gallon. With regular gasoline selling at about 31 cents per gallon in my State, you can readily see this amounts to a retail sales tax of approximately 47.5 percent on this vital commodity. If even another 12-cent tax should be imposed at the Federal level, then the combined tax rate would be one-half of the retail price, or 50 percent.

It is doubtful that gasoline taxes can be pushed very much higher before they substantially affect consumption and tend to curtail the use of automobiles, thus decreasing tax revenue. The highway use of gasoline showed a strong growth trend for several years after the end of World War II. Since 1955, however, the trend has slackened considerably and for 1958 consumption was only slightly more than in 1957. Perhaps even more important is the apparent downtrend in recent years in the number of miles traveled per vehicle. The sales of small economy and foreign cars has greatly increased in the United States in recent years and the Big Three automobile manufacturers have recognized the situation by announcing plans to produce their own economy models in the fall of this year. Economy cars and small cars accounted for 8 percent of all automobile sales in the United States in 1958, and the percentages are expected to be higher in 1959. There is no doubt that one of the reasons people are buying these cars is because of the high tax on gasoline which makes it high priced. Use of this type car not only cuts into the consumption of gasoline and reduces tax revenue from gasoline, but it also reduces the revenue from the sale of automobile tags and plates, a prime source of the State road revenue. For example, sales of motor vehicle license tags accounted for $44 million of State income in Florida in the last fiscal year ending June 30, 1958.

One and a half million dollars of the Federal automotive taxes collected in the fiscal year 1958 were diverted away from highway uses and went into the general fund of the U.S. Treasury. This included revenue from the 10-percent Federal excise tax on automobiles and the 8-percent tax on parts and accessories, plus one-half of the 10-percent tax on trucks and buses. If this diversion were stopped, then the highway trust fund would have enough money year by year to finance the Federal Interstate System on a pay-as-you-go basis. The Nation's highway users are charged with the entire responsibility for financing this program, and thus it seems only logical and proper that all proceeds from the special Federal automotive taxes they pay be taken into account and deposited in the trust fund. As a matter of fact, Federal highway law itself contains a provision to penalize States which divert their own highway user tax revenue to nonhighway purposes. This provision states "it is unfair and unjust to tax motor vehicle transportation unless the proceeds of such taxation are applied to the construction, improvement, or maintenance of highways." The present program about which we are now concerned was enacted in 1956 on the claim that it was essential to national defense, civil defense, and the well-being of the economy as a whole. General benefits to the whole country were stressed. Yet the whole burden of paying for the program was placed on one class of citizens: motor vehicle owners and users. If the highway program is essential to national defense, then it would be proper to argue that the Department of Defense make some provision in its budget for paying a part of the cost of this program. Also, recent surveys show that the Interstate System tends to strengthen areas through which it passes and raises property values and the general economy of the area. This being true, it appears there are beneficiaries other than the highway users. Also, many people in rural

areas who may never or seldom use the interstate facilities are contributing heavily to their construction already through the 1956 increases in Federal gasoline and automotive taxes.

The financing of the Federal Interstate Highway program over the life of the program could be handled adequately if all highway user taxes paid to the Federal Government were used for this purpose, or if the time schedule for the program could be extended for a longer period. Either course would be less inflationary and fairer to the public than a proposed tax rise. There is no magic in the present schedule and it could easily be altered so as to meet the realistic situation which we have. Such a vast and extensive program will probably benefit from careful consideration anyhow. Mistakes have already been made which were very costly and further mistakes could be avoided if more care and time were used. We could also act to prevent undue speculation in right-of-way land.

Finally, I feel strongly that the gasoline tax should be a primary source of revenue for the State, as it has been traditionally. Any further increase at the Federal level will jeopardize States like Florida which already have a high gasoline tax rate and which depend on this one tax alone for about 23 percent of the total State revenue. Although there has been talk of a temporary increase in the Federal tax rate, experience has shown us that there is rarely, if ever, in any such thing as a temporary Federal tax.

I urge you to reject any proposal which would raise the Federal gasoline tax and look elsewhere for a solution to the financing problems of the Federal Interstate System.

The CHAIRMAN. We appreciate your being here.

Mr. SIKES. Thank you.

The CHAIRMAN. Our next witness is our colleague from Wyoming, the Honorable Keith Thomson.

STATEMENT OF REPRESENTATIVE KEITH THOMSON, OF WYOMING

Mr. THOMSON. Mr. Chairman and members of the committee, I appreciate this opportunity to appear before you and present some of my views with respect to the highway program and its financing that I hope may be of some help to you. I am mindful that if a proposal reaches the floor, as a Member, opportunity would be afforded me in debate. Because of my respect for this committee, though, I would prefer to make my views known to you so that they may be weighed for what they are worth in your deliberations.

I believe that almost all Members of Congress agree, as do I, in the importance of continuing the interstate highway program at a suitable level, and will support that which is required to assure such a continuation. The tough job confronting the committee, as is always the case, is "Where are you going to get the money?" I believe that the scope of your investigation should properly go beyond that, to determine just what is a suitable level for the program.

There are several ways in which the problem now confronting us might be solved. Some of the most apparent are:

1. We could cut back the program.

2. We could increase taxes, as has been suggested by some.

3. We could resort to deficít spending.

4. We could cut spending in other areas, permitting the program to go forward at a suitable level without resorting to either deficit spending or increased taxes.

Undoubtedly there are others which might be suggested, but to me, do not seem to be worthy of special consideration.

The deficiency in the highway trust fund is not a problem that suddenly confronts us, even though it is just now coming to a real

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showdown. In 1958, when the temporary acceleration of the program was passed, the thinking person knew that this was going to push us into deficiency. It is unfortunate, in my estimation, that those who pushed the depression panic button for what were, in large measure, political purposes, a year ago prevailed. Some of us who voted against such actions might well take the position that we did not contribute to this situation, so we can with good conscience vote against it and say that any effect as far as continuing of the highway program is not fault of ours. In this I cannot agree. The fact is that the action was taken by a majority vote of the Congress. That is water over the dam.

For the same reasons that I have voted to increase the debt ceiling, I propose to take responsible action as far as this problem is concerned. I believe in the necessity of the basic highway program, including the Interstate System, and the benefits that will accrue from it. To allow this program to disintegrate would be a national

error.

It would be contrary to the public interest. We do have a present need for improved highways.

Besides keeping faith with the contractors and other suppliers who have made their plans, in response to the projected program, a widely fluctuating level of construction would, in the long run, be more expensive to the taxpayer and contrary to the public interest.

Without going into further considerations, I think we can agree that solution No. 1, a drastic cutback in the program, is not acceptable. This does not, however, in my opinion, prevent minor adjustments, particularly with regard to retrieving, insofar as we can, what I consider to be the error of the 1958 acceleration.

Furthermore, I have talked with a substantial proportion of the Members of Congress with regard to the handling of the program. As a matter of fact, it was discussed out of order in one of the recent meetings of the full Appropriations Committee. As a result, I am convinced that there have been widespread, if not uniform, excesses which might well be eliminated. We could do these things and still provide for a continuing program at a suitable level.

This is not a solution, however. Although there seems to be the substantial agreement which I mentioned as to the continuation of the highway program, the solution as to how it will be financed seems to have centered upon either increasing taxes or deficit spending. I have not and do not now subscribe to either of these proposals.

At the outset, I want to make it clear that I commend the President for his position with regard to deficit spending and I am, if anything, more adamant than he is, that we cannot continue to add to deficit spending for any purpose whatsoever, unless the needs for national security should change, by revenue bonds or any other name that you call it.

From the time that his message was presented, however, I took the position that we could, if we had the political courage, provide for adequate highways and other necessary and proper functions of government, without increasing taxes or resorting to deficit spending, by a third method of reducing spending for general governmental

purposes.

When the Secretary of the Treasury and the Director of the Bureau of the Budget appeared before the full Appropriations Committee

last January 20, to which hearings I will refer later, I stated, "We can look for further cuts in the expense items, which is another way of balancing the budget."

I then and there rededicated myself to the proposition that we should make sufficient cuts in the general governmental spending that all of the revenues collected from the highway users could, if necessary, go to the highway trust fund, so that we could build highways without increasing taxes and at the same time avoid deficit spending, either for highways or for general governmental purposes.

I still believe that this is possible and, as long as there remains a possibility, I think it would be a tragic error for this committee or the House to pass an increase in taxes. This would be particularly true at this moment, when we consider the staus of the appropriation bills and the effect that such would have in weakening the hands of the House conferees in their efforts to prevail in sustaining the position of the House.

I would point out that the House has done a pretty good job. We have cut, in compliance with a majority of the membership of the House, which I said was the purpose, $1,210 million. When the bills left the Appropriations Committee it was $1,396 million off of the budget requests. But when the bills went to the Senate, they not only wiped out all of that, but they added another $500 million on to the President's budget requests.

On the status of the bills that have become law, we have still $300 million in reductions. But these critical bills which have thrown it up over $500 million on the Senate side are in conference. Now would be a pretty bad time to weaken the position of our conferees, if you believe the position I expounded is a good one, by saying, "We will pass an increase in taxes." We better leave them in a position when they are in conference that they have a strong hand, and they can say to the Members of the other body, "If you are going to insist on this spending, then you have to take the brunt of it. We think you should sustain the House position, and take care of highways and other items, without deficit spending or increases in taxes."

That is the position I think we should go for.

This committee should give very serious thought to the appropriation situation before recommending an increase in taxes on gasoline and motor fuels. The highlights of that situation seem worthy of reiteration.

Although in many instances we have appropriated more than myself and the majority on my side of the aisle would have preferred, when we analyze the appropriation bills acted upon to date, it comes down to this: The House has generally stayed within the bounds of good sense. We have stayed well below the budget requests. The Senate has not. They have not only wiped out the House savings, but have gone above the budget requests.

The House Appropriations Committee, by very careful consideration and sincere effort, has been able to reduce budget requests to date, including the Atomic Energy Commission appropriation bill, by $1,396 million. In spite of the "spender" efforts by some Members of this body, and altogether too often on close votes, the action of the committee has generally been sustained. As a matter of fact, as these bills were passed and submitted to the other body, the House in its