Hon. WILBUR D. MILLS, INSTITUTE OF SCRAP IRON & STEEL, INC., Chairman, Ways and Means Committee, House of Representatives, New House Office Building, Washington, D.C. DEAR MR. MILLS: The Institute of Scrap Iron & Steel Inc. is the trade association representing the iron and steel scrap industry in the United States. We have approximately 1,300 member companies, mostly small dealers. Our industry over the past 2 years has been suffering under the impact of reduced demand for its product by domestic steel mills. In this situation, our members, particularly those in remote areas, have found that high rail freight rates for scrap have hindered their access to markets. In an effort to meet this competition and to lower their transportation costs, our members have increasingly turned to the use of trucks. In addition, as an industry, we use many trucks to haul iron and steel scrap from local industrial plants to our processing yards. Because of current difficulties in the industry, and the need to avoid cost increases wherever possible in order to retain our competitive position, we feel obliged to oppose vigorously the proposed increase in the Federal gasoline tax. We do not feel that road construction under the Federal highway program need be continued at the pace established last year as an antirecession measure. We feel that available funds should be used to their utmost, and that, if necessary, the program be phased out, rather than impose additional gasoline taxes on the general public and on business. We would request that this letter, as representing the majority views of one segment of the business community in opposition to the gas tax increase, be made part of the record of the hearing held by the Ways and Means Committee last week. Chairman, House Ways and Means Committee, DEAR MR. MILLS: The Association County Commissioners of Georgia, an organization of county officials who by State law are charged with the primary problems of road construction and maintenance and the conducting of the fiscal affairs of their respective counties, have gone on record as opposing any increase whatsoever in the Federal gasoline tax. It will be appreciated if you will put in your records of the hearings to be held on July 22 on ways to finance the highway program, the position of this association in positive opposition of any increase of gasoline tax in any amount whatsoever. Thanking you in advance for your courtesy in this matter, I am, JAS. W. KEYTON, President. FINANCING THE FEDERAL-AID HIGHWAY PROGRAM Statement of Ross R. Ormsby, president, the Rubber Manufacturers Association, Inc., filed with the House Committee on Ways and Means, July 24, 1959 The rubber manufacturing industry, producing tires and many other products essential to automotive safety, has championed the cause of better, safer, and more efficient highway systems for more than 50 It was a leader in the "good roads" movement prior to World War I. After World War II, it joined with other like-minded groups in calling for an accelerated highway program to overcome the critical highway deficiency. years. Our industry strongly supported the Federal Highway Act of 1956 as the best means of providing an adequate highway system for our Nation. Every argument that was advanced during the lengthy House and Senate hearings of 1955 and 1956 concerning the needs for these highways is even more important today. The economic need for relieving highway congestion and improving the safety of highway travel is today of increased importance to the Nation. Our industry believes that of all of the Federal programs, the completion of the highway system authorized by the 1956 highway act will contribute most to the growth of our Nation's economy and the improvement of its standard of living. We strongly advocate that nothing be allowed to interfere or interrupt the scheduled completion of the Interstate and Defense Highway System. The financial crisis in highway construction now facing us could have been predicted when the 1956 act in its final form was approved into law. As finally approved, the financing provisions of title II were not balanced with the authorization provisions of title I. When the act passed the House, there was a balance between the authorized program of title I and the financing provisions of title II. However, by inclusion and acceptance of the so-called Byrd amendment, the balance was destroyed. The financial crisis now before us is of greater magnitude than could have been foreseen in 1956 because 1. The estimated cost for completing the Interstate System rose sharply after the States carefully and scientifically recalculated the cost. 2. An additional 1,000 miles were added to the system, bringing the total to 41,000. 3. The highway trust fund was required to pay for nearly $2 billion worth of highways that had been previously authorized before passage of the 1956 act. 4. The costs of the highways authorized in the 1958 act as an antirecession measure were charged to the highway trust fund. Prior to the 1956 act, financing of Federal-aid highways had always been accomplished through appropriations from the general fund. The 1956 act created the highway trust fund providing that some of the revenues of Federal excise taxes on highway users and automotive products would be used for financing not only the new Interstate System but also the normal and historical primary, secondary, and urban systems. Considering the cost estimates then before it, Congress dedicated to the trust fund only that portion of the tax revenues coming directly from special taxes on highway users as were considered necessary to finance the program. The rubber manufacturing industry supported the dedication of all revenues derived from the Federal excise taxes on tires, inner tubes, and tread rubber. Now before this committee are proposals for further taxes on the highway user, namely, an increase in the Federal excise tax on gasoline. At this time we wish to register our opposition to any increase in the Federal gasoline tax or any other change in Federal taxation of highway users and automotive products as inequitable and unnecessary. Our position is based upon the fact that Congress itself in passing the 1956 act admitted that the taxing provisions of that act required careful review to make certain there was an equitable distribution of the tax burden among highway users and other nonuser beneficiaries of the highways. Congressional doubt was expressed in section 210 of the 1956 act which requires careful investigation and subsequent report to Congress. This report is scheduled to be made to Congress in early 1961, at which time it has always been anticipated that Congress would make a decision concerning the equitable distribution of the tax burden and establish long-range financing system to assure scheduled completion of the Interstate System. We maintain that any change in current tax laws would be a prejudgment of the section 210 study and thus might compound the inequities. The engineers are designing the Interstate System to handle estimated traffic needs for 1975. These roads, being built to long-life, high standards, are one of the Nation's most important capital investments. We know of no other capital investment that would contribute to an expanded national economy as this urgently needed highway system. Therefore, until such time as Congress has the opportunity to receive and study the reports called for under section 210 of the Highway Act, we recommend that the current short-term financial crisis be handled by some form of credit financing. In our testimony in support of the 1956 act, we pointed out the possibility that the revenue accruing to the highway trust fund would in future years increase at a greater rate than shown by the official Government estimates. For the fiscal years 1958 and 1959, the highway trust fund receipts were, in fact, greater than the estimates made in 1956. This occurred despite the general economic recession of 1958. We are still of the opinion that those 1956 estimates were conservative and as more of these highways are completed, permitting greater automotive travel, the revenues from highway user taxes will be further increased. Therefore, any form of credit financing to be repaid from future trust fund receipts will in our opinion be a sound financial arrangement. Credit financing through “repayable advances" from the general fund will, of course, affect the budget and impinge upon the national debt ceiling. Of all the Federal outlays, this one would have assured repayment, being unlike most of the other enormous Federal spending programs. As an alternate to “repayable advances" we understand that a mechanism could be established permitting the sale of short-term revenue bonds with future highway trust fund receipts as collateral, which would not affect the Federal budget or constitute a debt or obligation of the United States. Any interruption or delay in the completion of the Interstate Highway System will in our opinion result in an economic loss to our Nation of such magnitude as to fully justify a sound credit financing program. We recommend the adoption of a short-term program of credit financing based upon future highway trust fund receipts, and delaying the final decision on long-term financing until 1961. Hon. WILBUR D. MILLS, UNITED FRESH FRUIT & VEGETABLE ASSOCIATION, Chairman, House Ways and Means Committee, Washington, D.C., July 14, 1959. DEAR CONGRESSMAN MILLS: It has come to our attention that your committee will hold hearings beginning July 22 on the proposed Federal motor fuel tax increase and other methods of financing the expanded Federal-State highway program. While we do not request time to appear before your committee, we respectfully request that this letter be included in the record of the hearings. On June 30, 1959, Alan T. Rains, executive vice president of this association, sent you the following telegram: "We understand your committee is giving active consideration to the tax increases on gasoline. We want to reiterate our opposition to any increases in gasoline tax which would add further financial burden to producers and distributors of fresh fruits and vegetables who are large users of motor vehicles in the transportation of their products. We believe additional moneys temporarily required to keep the highway program on schedule could come from the general funds of the Federal Government or through repayable advances. We respectfully urge your committee to reject this or other proposals which would increase the present tax on gasoline." We wish to state once again that our position has not changed, and, accordingly, we urge the rejection of any proposals which would increase the tax on motor fuels. Sincerely, BERNARD J. IMMING, Secretary. STATEMENT SUBMITTED BY G. C. STEWART, EXECUTIVE VICE PRESIDENT, NATIONAL SAFETY COUNCIL Statement of the National Safety Council in Response to a Request From the Committee on Ways and Means of the House of Representatives for an Expression of Views With Respect to the National Highway Construction Program The National Safety Council is restrained by the letter and spirit of its congressional charter from becoming involved with the legal, financial, or political aspects of specific legislation. For this reason, our statement is directed only at the accident-prevention aspects of the matter the committee has under consideration. The Council is disturbed by the prospect that there may be a delay or stretchout in the national highway construction program, because we believe that such a delay or stretchout will result in more traffic accidents than would occur if construction were completed on schedule. Controlled-access highways of modern design have proven their potential for reducing traffic accidents. As immediate proof, we cite the recent Memorial Day weekend, when "imme diate" motor vehicle deaths totaled 310, a new high record for this holiday weekend. During this same weekend, 16 major turnpikes set a new low record. These 16 turnpikes handled nearly 5 million vehicles, which traveled 150 million miles, without a single fatality and only 3 serious injuries. Even more significant is the record for the entire year of 1958, when there were 7.3 deaths per hundred million miles of travel on rural roads, while on turnpikes the rate was only 2.8. This comparison indicates that the accident rate on highways of the interstate type is little more than one-third the rate on rural roads generally. Taking into account this far better safety record on controlled-access, moderndesign highways, the National Safety Council's statistical staff has investigated the safety consequences of any delay in the Interstate Highway System construction program. Their analysis reveals some very significant facts which are appended to this statement for inclusion in the record, the committee so agreeing. In brief, the facts are 1. Controlled-access, modern-design highways already in use are reducing traffic deaths 700 a year below what they would be without these highways. 2. With each year's extension of the system, scheduled for substantial completion by 1970, there will be additional lives saved which, during the period 1960-70, will accumulate to a total saving of 30,000. 3. Delays or stretchout in planned construction will result in unnecessary loss of life. For example, if no additional highways were built in 1960, thus delaying completion of the entire system for 1 year, about 5,700 more deaths would occur by the time the system is completed than would have occurred had the system been completed on schedule. We face the fact that the return of better economic conditions this year has brought a greater than average increase in motor vehicle travel. No one regrets such a manifestation of better times, but certainly no one wants to pay for it in terms of human life. The situation calls for stepped-up accident prevention measures by all public and private agencies. Since experience has proven conclusively that accident rates are substantially lower on the types of highways being constructed for the Interstate System, and since these lowered rates will save human life, prevent suffering, and reduce social and economic costs, the National Safety Council believes it to be in the best interest of our people that there be no delay or stretchout in the construction program of our Interstate System of highways. HOW MANY LIVES WILL CONTROLLED-ACCESS HIGHWAYS SAVE? Projection of recent urban and rural trends in motor vehicle death rates, including the contribution from the very low rates on toll roads and other controlled-access highways, indicates that by 1970 the national rate can be as low as 3.7. This requires, however, that vehicle mileage on controlled-access, moderndesign highways increases as rapidly as the planned construction program will make possible. Commissioner Armstrong of the U.S. Bureau of Public Roads estimates that if the construction of the Interstate and Defense Highway System continues according to plan, most of it will be in operation by 1970, and it will then be carrying 20 percent of the national total of vehicle miles, or about 200 billion. In 1958, toll roads recorded a fatal accident rate of 2.8 per 100 million vehiclemiles-approximately one-third of the death rate for all rural highways in 1958. While the experience on some toll roads-particularly in New Jersey and New York-is considerably better than this, a conservative assumption for the Interstate and Defense System Highways as a whole is that they will have an average rate of 2.8 each year to 1970. The recent trend of the rural accident death rate indicates that the rate for other rural roads will decrease from about 7.4 in 1959 to 6 in 1970. With these trends, the lifesaving capability of controlled-access, modern-design highways during the 12 years 1959-70 can be measured. Less lives saved by continued use of Interstate System roads already built. Lives which can be saved by travel on Interstate System roads if completed on 7,300 30, 500 The effect of a delay in the Interstate and Defense Highway construction program can be determined from this table. For example, if the whole schedule of work were delayed 1 year, it can be assumed that the accident experience of 1960 will be similar to that of 1959, and the record for 1970 will be similar to that of 1969. In that case, the estirates of lives saved in each year would be as follows: Less lives saved by continued use of Interstate System roads already built 7, 300 Lives which can be saved by travel on Interstate System roads 24, 800 Lives saved during the 12 years 1959-70 would thus be reduced 5,700 by a one year delay in the construction program. This reduction in lives saved would never be made up, for in the years after 1970 the number of lives saved would be the same with or without construction delays in the years 1959-70. Other assumptions regarding delay in the construction program will yield different amounts of reduction in the total of lives saved. Approximations can be made from the table which, in most cases, will be satisfactory for judging the effect of the delay. |