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    "localId": "16857636",
    "label": "Memorandum from Phillip Hughes to President Dwight D. Eisenhower Regarding the Highway Act",
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    "id": "16857636",
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    "contentType": "document",
    "title": "Memorandum from Phillip Hughes to President Dwight D. Eisenhower Regarding the Highway Act",
    "citationUrl": "https://catalog.archives.gov/id/16857636",
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    "productionDates": [
        {
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            "logicalDate": "1959-09-17",
            "month": 9,
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    "seq": 4,
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    "ocrText": "APPROVED\n1959\nEXECUTIVE OFFICE OF THE PRESIDENT\nBUREAU OF THE BUDGET\nWASHINGTON 25, D.C.\nSEP 21 1959 SEP 1959\nSEP 1959\nMEMORANDUM FOR THE PRESIDENT\nstatement\nSubject: Enrolled Bill H. R. 8678 - Federal-aid Highway Act of 1959\nSponsor - Rep. Fallon (D) Maryland\nissued\nLast Day for Action\nSeptember 22, 1959 - Tuesday\nPurpose\nTo enable continued construction of the Interstate Highway\nSystem on a pay-as-you-build basis, to further restrict Federal\ncontrol of billboards, to provide for a study of Alaska and Hawaii\nhighway needs, and to authorize funds for miscellaneous highway\nprojects.\nAgency Recommendations\nBureau of the Budget - Approval\nDepartment of Commerce - Approval\nDepartment of Agriculture - Approval\nCouncil of Economic Advisers - Approval\nDepartment of the Treasury - No objection\nSpecial Assistant for Public Works\nPlanning - No objection (informally)\nDepartment of the Interior - No recommendation\nDiscussion\nA. Main provisions\nThe bill provides revenues to the Highway Trust Fund that\nwill enable the Secretary of Commerce to apportion part of 1961 and\n1962 interstate highway authorizations among the States by increasing\nthe tax on gasoline by one cent until June 30, 1961, and diverting\namounts equal to a 5 percent excise tax on automobiles, parts and\naccessories, etc., to the Fund for the three years following that\ndate. It also reduces the 1961 authorization of the Interstate Sys-\ntem from $2.5 billion to $2 billion. It approves the 1958 estimate\nof the cost of completing the Interstate System as a basis for\napportioning the 1962 authorization.\nThe\nLibrary\n2\nThese changes in the law do not provide a completely\nsatisfactory solution to the problem of highway financing. First,\nthe tax increase will not provide the immediate revenues needed to\nmeet existing obligations during this fiscal year. For this\nreason, a repayable advance of $359 million from the general fund\nhas been sought and provided in the Mutual Security Appropriation\nbill. Second, the revenues provided are not sufficient to allow\napportionment of the full authorizations for 1961 and 1962. As a\nresult, apportionments in each year will be approximately $200 mil-\nlion less than authorized. Third, the diversion of excise taxes\nfrom the general fund will reduce the revenues available for general\nbudget expenditures in the fiscal years 1962, 1963, and 1964. We\nbelieve that this diversion is very objectionable, and that every\nattempt should be made to change the law before it becomes effective\nto ensure that the Interstate System be constructed with taxes imposed\nfor that purpose and not by diverting taxes dedicated to paying gen-\neral Government expenses. In this connection, the report of the\nSecretary of Commerce relating to equitable taxes for financing high-\nway construction is required by law to be made by January 3, 1961.\nIt may provide the basis for recommending taxes to replace the\nscheduled diversion.\nDespite these deficiencies, we believe that the bill repre-\nsents the best compromise on financing arrangements that can be made\nat this time.\nB. Miscellaneous provisions\nThe bill also requires the exemption (existing law is per-\nmissive) of highways crossing land zoned for industrial or commercial\nuse within incorporated communities from the law providing national\nstandards for billboard control. As a result, States will be unable\nto receive the authorized Federal incentive contributions for highways\nin these areas which meet these standards.\nThe required study by the Secretary of Commerce of Inter-\nstate System needs within Alaska and Hawaii may provide desirable\ninformation. However, the January 14, 1960 reporting date will make\nconduct of an adequate study difficult and will prevent use of the\nfindings of the Alaska International Rail and Highway Commission's\nstudy, which will not be completed until 1961. The study arises from\nthe fact that these new States have no Interstate System highways\nalthough their citizens pay the increased highway taxes.\nThe bill authorizes the appropriation of $2 million for\nrelocation of a portion of the Natchez Trace Parkway in Mississippi\nwhich will be flooded by a lake being constructed by the Pearl River\nValley Water Supply District to provide water for local needs. Pay-\nment of the costs of relocating Government roads flooded by locally-\nsponsored projects providing local benefits is usually a local\nLIbrary 100 IDWIRDED\n3\nresponsibility. In this case, local authorities propose to pay\nonly $600,000 of the total cost. The bill also authorizes the\nSecretary of Commerce to use his emergency fund to pay the full\ncost of repairing disaster-caused damage to forest highways under\nhis jurisdiction and to various roads and trails under the juris-\ndiction of the Secretaries of Agriculture and Interior. This\nsection was occasioned by the recent earthquakes in the vicinity\nof Yellowstone Park which damaged some National Park and National\nForest roads. In the absence of this section, the cost of repairs\nwould be met by reprogramming funds available to the Department\nconcerned. The section provides a method for bypassing the budget\nand appropriation process. The bill also provides $3 million of\nadditional contract authority for constructing bridges over Federal\ndams. Since such bridges can be constructed with ordinary Federal-\naid funds, which have been greatly increased since the original\nauthorization for bridges over dams, the Department of Commerce\nand this Bureau opposed the new contract authority when it was under\nconsideration as a separate bill.\nWe doubt the wisdom or necessity of these miscellaneous\nprovisions. However, we do not believe they are of sufficient\nimportance to warrant disapproval of the main provisions.\nC. Future legislation\nIn responding to our request for views on the enrolled\nbill, the Special Assistant for Public Works Planning asked us to\nbring to your attention his proposed amendment to the highway laws\ndesigned to restrict the use of Interstate Highway funds on projects\nserving primarily local needs. His proposed language is attached.\nOlly S.Anghes\nAssistant Director for\nLegislative Reference\nEnclosures\nLIbrary ina"
}