Trust Fund protected by vested interests. It is one of the most powerful lobbies in Washington. The only answer I could come to is to abolish the whole thing and set up a transportation trust fund to take care of trains and take care of mass transit and also build highways as we need them. We need to set priorities in terms of need, not just pile more moneys into reserves that are unneeded and are so in excess of what is available for other means of transportation.

Senator FULBRIGHT. Of course, Senator Percy, I am very sympathetic to your mass transit needs in Chicago. However, you must realize there is a tremendous difference. My State has no urban areas comparable to Chicago. The largest city in my State is only around 200,000. My problems are different from yours. I have no objection to a mass transit fund but we have a very great need for roads, it is a big State with few people. We have very different situations than you have. I would not oppose a mass transit trust fund if you like. I do oppose diverting what we have got and we have sold for this specific purpose for another purpose. I can't bring myself to do that because of the needs of my State. They are quite different from yours. You are a very highly urbanized State and I come from a much more rural State. I have 2 million people in 53,000 square miles and we need the roads to connect what communities we have. That is one of the highest priorities in my State.

Senator PERCY. Maybe we can get an answer from one of our witnesses who is representing the highways interests. I am looking forward to hearing his testimony.

Senator FULBRIGHT. Mass transit is a problem here in Washington and every major city I know of in this country has deplorable transportation. I would be willing to support mass transit. I would so much rather do that than go to the moon or build an additional aircraft carrier which I don't think we need. I can think of a dozen things.

Let me say one word, keeping in mind the President's and Mr. Weinberger's very, very harsh criticism of the Congress. A great many of us felt that we were wasting our funds on various areas such as I have mentioned, and we were overridden. Then when other programs came up we felt that if you are going to throw money away on going to the moon or on these exotic weapons systems like TFX that are no good, or C-5A, then the sky is the limit on other programs, which we consider good ones. It removed the normal restraint or balancing that would take place. In other words, what I am saying is that it distorted our judgment in other areas because of the frustration arising out of the wastefulness of some of these programs. This is a little amateur psychology but I think this is what has happened. I have heard people say, well, if you are going to spend all of that money to do all that. then there is no limit on what we will take on for a good purpose and one they thought was good, a domestic purpose. If we get the war over, I think a lot of this type of thing will cease and the Congress will be a lot more responsible across the board.

Senator PERCY. Thank you very much.

Senator ERVIN. Just three questions. Don't many of the appropriations bills such as those that authorize various weapons systems often give discretionary power to the Executive as to how they will be spent and how much will be spent?

Senator FULBRIGHT. They do recognize that distinction, especially in the field of high technology.

Senator ERVIN. And this bill only applies to appropriations which are made for specific purposes?

Senator FULBRIGHT. That is correct.

Senator ERVIN. And would not affect any appropriation bill that gave discretionary powers to the President?

Senator FULBRIGHT. That is right.

Senator ERVIN. And, now, don't you think that the President ought to welcome the passage of a bill of this character because it gives him a chance, it says where he impounds funds, he shall report the impoundment and give the reasons for the impoundment?

Senator FULBRIGHT. That is right.

Senator ERVIN. And so it would give the President an opportunity to use his persuasive authority and logic of reason to get Congress to ratify the impoundment?

Senator FULBRIGHT. I think he would have a great advantage.

Senator ERVIN. Has the Senate so far lost all hope that the Congress under those circumstances would not exercise logic, reach an intelligent conclusion, if the President gave the Congress intelligent reasons for the impoundment?

Senator FULBRIGHT. I think they would. I think Congress would welcome it and I think it would create a much better spirit between the executive and the legislative.

Senator ERVIN. With reference to one other question. When the question came up of placing a ceiling of $250 billion last session, the Senate adopted an amendment by Senator Len Jordan, from Idaho, which provided that there should be a ceiling on all appropriations made at that session of the Congress of $260 billion and especially authorizing the President to cut the appropriations down to the $60 billion, which required him to cut it in equal proportions in respect to all programs.

Senator FULBRIGHT. That is right.

Senator ERVIN. And did not the administration use its influence to defeat that amendment in the House on the theory that the President should be allowed to pick out some programs and eliminate them and continue other programs in full.

Senator FULBRIGHT. That is right. The administration opposed that very vigorously.

Senator ERVIN. That would have been a very happy solution to the whole problem?

Senator FULBRIGHT. I voted for that because it retained the same. proportion in appropriations and in a sense retained the relative importance of various policies.

Senator ERVIN. That recognized that there was desirability of restraining, but it also recognized under the Constitution that the Congress, and not the President, had the power to determine the objects for which expenditures would be made.

Senator FÜLERIGHT. That is right. It retained the emphasis that had been determined by the Congress and the President jointly.

Senator CHILES. Mr. Chairman, this is kind of a hole in our time now because we thought we had a witness for 12 o'clock, the Secretary

of Agriculture, but it looks like that is not going to happen, so I suggest we now recess until the hour of 1:45.

Senator ERVIN. All right.

(Whereupon, at 12:05 p.m., the joint hearing was recessed until 1:45 p.m. the same day.)

AFTERNOON SESSION

Senator CHILES. The hearings will come to order.

The first witness we will hear from is Mr. Stafseth, the executive director of the American Association of State Highway Officials.

STATEMENT OF HENRIK E. STAFSETH, EXECUTIVE DIRECTOR, AMERICAN ASSOCIATION OF STATE HIGHWAY OFFICIALS (AASHO), ACCOMPANIED BY THOMAS F. AIRIS, PRESIDENT OF AASHO

Mr. STAFSETH. Mr. Chairman, I would like to say I have with me today, and he will be doing the testimony for the American Association of State Highway Officials, Mr. Thomas Airis, the president of the American State Highway Officials. At this time I will turn it over to

Mr. Airis.

Mr. AIRIS. Senator Chiles, Senator Percy, and gentlemen of the committee, we have approximately four pages of testimony and with your permission will just run through it, but if you prefer something else we are at your pleasure.

Senator CHILES. That will be fine if you just run through it.

Mr. AIRIS. All right, sir.

Mr. Chairman and members of the subcommittee, I am Thomas F. Airis, Director of the District of Columbia Department of Highways and Traffic. I have been honored this year to serve as president of the American Association of State Highway Officials, and it is in this capacity that I appear before you today to testify on S. 373. I am accompanied by Mr. Henrik E. Stafseth, executive director of AASHO. The American Association of State Highway Officials' membership is composed of the transportation and highway departments of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the territory of Guam, and the Federal Highway Administration.

AAHSO has not had time to consider and adopt a position specifically on S. 373, but the matter of Federal impoundment of highway trust funds has been a problem to our member departments for a number of years, during which time AASHO has previously made its position known to the Congress on this important issue.

The impounding of funds has caused serious disruption to the highway programs of most States, and in some cases, this disruption has been very severe.

The States have enjoyed a close Federal-State partnership dating back to the Federal-Aid Highway Act of 1916, and it is important to understand that the current program, since 1956, has been gigantic in size. In order to deliver benefits to the public, as was intended in the authorizing legislation, it is extremely important that State organizations utilize the best management techniques and most up-to-date

sophisticated programing in the fields of planning, financing, design, construction, and operations.

Since the program requires that State matching funds to complement the Federal apportionments must be provided through bonding, State taxes, et cetera, it is obvious what damage is caused to this sophisticated chain of operations by unilateral decisions of the Federal partner to impound Federal moneys from the highway trust fund.

Such hop-skip or start-stop issuance of funds results in costly inefficiency; cancellation or slowing down of right-of-way acquisition with resumption at higher prices later; and the accompanying neighborhood turmoil due to indecision, personnel reductions in force, and I cancellation of anticipated construction contract advertisements, to name but a few of the difficulties.

In my testimony today, I would like to briefly review the pertinent points raised in the original AASHO statement, dated March 1, 1967, by Mr. E. M. Johnson, AASHO president, which was filed with the Public Works Committees at that time. A copy of this statement is attached for the record.1

Also attached, for the record, is a copy of the AASHO resolution concerning the same subject that was approved at the executive committee meeting at Cheyenne, Wyo., September 16, 1968.2

In addition, there is submitted for the record a chronology of withholding events.3

Lastly, I will quote verbatim, article 7 that is concerned specifically with the cutback issue. It is a part of a 22-point program adopted by AASHO in 1972, and again reaffirmed by the AASHO organization in the late fall of 1972.

THE 1967 STATEMENT

The first freeze or cutback was ordered on November 23, 1966, and because of its unexpectedness, timing, and the shock that resulted among the State organizations, it was commonly known as the Thanksgiving turkey. The March 1, 1967, AASHO statement I have mentioned was a direct result of this action.

A review of its text indicates most of its recital of the ill effects of withholdings or cutbacks, are as true today as they were when the statement was filed with the Public Works Committee in 1967.

In it, Mr. Johnson estimated a 212-percent increase in costs of Interstate and ABC programs for each year of delay.

Hindsight based on the Engineering News-Record construction cost. index indicates the additional cost has been closer to 8 percent per year of delay during the years since 1966.

The statement also included some pertinent comment which I am quoting as follows:

Both the state highway departments and the highway industry of this nation had great credance in the intent statement of Congress that the Interstate program should be completed as soon as possible, and we, of the state highway departments, have built up personnel and have planned accordingly.

"Another thing that complicated the picture was that there was no indication whatsoever as to how long the cutback would remain in effect. This complicated the problem of the highway departments rescheduling their work program and 1 See p. 588.

2 See p. 586.

* See p. 587.

90-538-73-18

making maximum and efficient use of their various classifications of skilled personnel.

I might add, since cutbacks have continued since 1966, it has resulted in a stop-go kind of implementation of the program.

Any savings resulting from slowing down the highway program until costs decrease lose their significance when compared with the loss in user savings and lives that would result in such a delay.

To support this contention, we refer to President Lyndon B. Johnson's remarks on August 13, 1964, when some of us had the opportunity of attending the signing of the Federal-aid Highway Act of 1964. In referring to the Interstate program he stated that it has put more than one million Americans to work, and that it was already saving 3,000 lives a year, and by 1972 (the original completion date), it will be saving 8,000 lives a year.

He stated further that it saved $6 billion in user benefits last year, which will climb to $11 billion a year at the completion date, and that the program is not costing the General Fund of the United States Treasury a single cent.

Now, then, I should add that in that statement there was a recognition that the national interest surmounts the highway department program wherein it was stated AASHO organization is mature enough to place the interest of the United States above our own programs, and we recognize that we should take the time and look pretty carefully at that aspect because one of the main reasons given for the cutback in those days was the prosecution of the Vietnam situation.

Now then, on the second item, the resolution I mentioned, there is appended a copy of an AASHO resolution concerning withholding of funds. As indicated, the resolution was forwarded to members of the 90th Congress on September 17, 1968.

CHRONOLOGY OF WITHHOLDING EVENTS

Further, as we mentioned earlier, there is appended, for ready reference, a chronology of events pertaining to cutbacks that have affected the AASHO member departments.

Of particular recent significance is the decision of the U.S. District Court in Kansas City, on the Missouri Highway Commission suit concerning the matter of withholding of funds from the highway trust fund, and the fact that Members of the Senate have filed a brief as a friend of the court with the U.S. Court of Appeals, Eighth Circuit, in St. Louis, Mo.

TWENTY-TWO-POINT PROGRAM

Lastly, I would like to quote article 7 of AASHO's current 22-point program. This article is concerned with cutbacks, delays, and allied matters. It is as follows:

(7) That the full amount of the Federal Highway Trust Fund revenues be used for their intended purpose of funding the Federal-aid highway program without cutbacks or delays, but that in case a cutback in the highway program is administratively ordered, an amount equal to the highway user revenues withheld be automatically distributed by the Secretary of the Treasury directly to the states in proportion to their respective contributions to the Highway Trust Fund, or that federal motor fuel taxes going into the Trust Fund be automatically reduced in the amount and for the duration of the administratively ordered cutback so that the states may, through appropriate state legislation, impose an equal tax at the state level for the duration of the cutback in the Federalaid Highway Program.