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Now, that is the point 7 of the 22-point program that Ash has most recently adopted.
In summation, I would like to point out that the periodic withholding of funds ever since 1966 has introduced an additional hardship to State implementing agencies-that, in our opinion, was not intended by the Congress, and certainly violates the spirit of the Federal-State relationship.
It, furthermore, results in more costly construction and, according to past actions I have cited, AASHO members are of the opinion that its continuance is definitely not in the public interest.
Accordingly, although' AASHO has not balloted specifically on S. 373, its past actions are definitely in support of the intent of this bill.
Mr. Chairman, this concludes my testimony, and the AASHO ofiicials thank you for the invitation to appear.
Senator CHILES. Thank you, Mr. Airis. Senator CHILES. Senator Percy, do you have questions? Senator PERCY. Yes, I will be very brief, Mr. Chairman, because Vr. Ash is here and wants to testify, and we do not want to delay him.
When we refer loosely to the highway lobby, are you it, or a substantial part of it?
Mr. Airis. I don't think any of the State departments feel they are a part of the highway lobby if there is such an organization, although personally, professionally, as director, there have been times when, if there was such a highway lobby, I certainly would have tried to use it.
Senator PERCY. Well, I don't cast any aspersions against lobbies. I think they serve a useful purpose. I think I belong to one of them, the Chicago Motor Club, and they are a part, certainly, of the lobby. They have been very outspoken in their criticism of positions that I have taken.
Mr. Arris. Sir, really, without any attempt at facetiousness, I think AASHO people probably constitute your top body of professional technical people, and as such I think they would feel it improper to constitute themselves as any kind of a lobbying organization. Now, Mr. Stafseth, do vou have anything to add to that? Senator Percy. I think that is sufficient for my purposes. I would like to simply present you with the problem we face and have you walk in our shoes.
As of the moment, we have $4,820 million of unspent funds in the highway trust fund. 'I know that we have an unlimited ability to use these funds, but I also know there is a surplus in one account and a terrible deficit in other means of transportation. If the CTA, rapid transit in Chicago, fails, goes under somehow-it is losing money hand
over fist right now, and can only be bailed out by public funds at of this stage--and if the Federal Government can't help, then you are
going to have to build, as Mayor Daley said, 70 lines radius to handle people getting in and out of the loop of Chicago? That situation is How do you propose when you have a surplus financing mass transit, railroads, as Senator Fulbright testified on this morning, of having balanced transportation systems when one area has so much money and the other areas are simply starving? As yet traffic is unbelievably impassable on the highways getting in and out of cities. You can
fared all over.
fly there quickly, but you can't get in from the airport at rush hours, and it is an inconvenience to the automobile user.
Wouldn't a transportation trust fund be a more sensible approach to this, and isn't this really why administration after administration has many times simply held up on these funds in order to have money for something else?
Mr. Airis. Well, Senator, the point you raise is extremely important to the country. I don't believe there is any debate on it. AASHO at present is looking at the problem of the 1973 bill. They have not taken a position at the present time on this, and I think it would be presumptuous on my part really to address myself to this larger problem which is not a part of this particular bill.
Senator PERCY. When I introduced legislation on this and testified, I was very pleased that members of the automobile profession-Henry Ford himself, and Leonard Woodcock, the President of the UAWhad come to the conclusion that a balanced trust fund is the right way to achieve a balanced transportation system. We can't have the situation of $4.8 billion of unspent funds in one account, while we have accumulated at the Urban Mass Transportation Administration unfilled capital grant applications of $2.6 billion right now. It just seems unrealistic for us to continue going this way. If you could exert your tremendous influence upon Congressmen and Senators to get us off the dime on this, I think we would not face the kind of emergency we now have.
Do you feel that President Johnson acted illegally when he im. pounded highway trust funds ?
Mr. AIRIS. All I could say, Senator, is what is in the record here. I wouldn't hazard a guess whether he acted illegally or not. That is up to the legal profession. All I can give you is our position on the problem as the professional, technical people. We felt it was very bad and I think you can recognize yourself the similarity between putting on a large program such as this which has been likened to starting a very heavy freight train. Once it is started, if it is stopped at any time, it is only with great trouble that it is started up again, or your water system in your house
Senator PERCY. Let me give you an easier one. Suppose during World War II, President Roosevelt impounded funds. Do you think there is any question that he had authority to do that when the nation was at war and when he felt that to win the war essary to discontinue programs as usual ?
Mr. Arris. Well, sir, as I tried to point out here, AASHO made the statement in the 1967 statement, that we felt that we technical people were mature enough to realize that our programs should not stand in the way of national interest. I think I would have to rest on that. The legal ramifications that you raise I think are beyond the State Highwav Department's
Senator PERCY. I think that is an admirable way to put it, and public-spirited.
Would you broaden national interest, then, not to just include war. but to include an economic crisis where inflation is very bad at home and picking the pockets of elderly and fixed-income people, where the dollar is being impounded because of our deficits that we have appropriated beyond income? Where the national interest would in
rolve the President as the Chief Executive Officer doing something which he felt was in the best interests of this country at that time? Rather than all-out war, an economic war could threaten, and he might see a perilous road ahead if we continued to spend at the same rate. Would you broaden your stand if the President could prove that set of extraordinary circumstances ?
Mr. Arris. Senator, I would have to rely on what I have said here, sir, and not get into my opinion, or my colleague's opinion, of the political or the economic ramifications of the entire problem. I think that is up to the Congress and to the administration to work out.
But I would like to add this, sir. You have mentioned a surplus. I think it is our position there is no surplus in the Highway Trust Fund. Congressman Harsha has introduced a bill this year that calls for some billions of dollars to be spent on highway safety, and in this regard, Senator, it is common knowledge that over 50,000 people are killed every year on our highways. Now, certainly this is a problem that is most serious. You can relate it to the casualties in Vietnam, or you have got a number of comparisons. But there is something that begs for attention.
Likewise, sir, many of our secondary roads are in very great need of additional work. Your own State has quite a program on resurfacing of rural secondary roads.
Now, all of these things are part of the problem that the legislative branch and the executive branch are going to have to address themselves to. I don't believe the AASHO can make this determination. But this part of it, this safety, this need for additional betterment, is a very serious problem, in our opinion.
Senator Percy. Well, I realize that, and you touch my heart when vou mention Illinois' secondary roads. I know they are dangerous, and we have had a balanced program to correct this over a period of time. But I don't mind taking our share of the cuts when it is in the national interest to do so. Those are your words and I think they are very good words, indeed.
I do think the highway deficit can be handled another way. I have a bill which would take a portion of the alcohol tax and set it aside for highway safety, to cut that 25,000 of the 50,000 deaths that are caused by drunken drivers. But that is another subject.
I think your testimony has been very helpful and broad-gauged and that you can work in the direction of walking in the shoes of the budget director here in the administration when he faces these problems.
I would like to take exception to one statement that you made, and, Mr. Chairman, I think this is very important. The statement was made that it does not cost the U.S. Treasury a single cent for these highway trust funds. That is not true, of course, because the Treasury's inability to touch the funds means it has to find money for other things by borrowing the funds. The cost of borrowing today is $22.8 billion out of our $250 billion budget outlars. That is 9 percent. That is a tremendous fixed cost that we have to start with when we start talking about the funds available for expenditure. Those are owed because we have not been able to touch other funds that have been earmarked. So it is a highly costly procedure to have these earmarkecl funds.
Thank you very much, indeed.
Senator CHILES. Mr. Airis, as I understand your testimony, you appear before the committee as representing the State highway officials?
Mr. Airis. I do, indeed. I would like to emphasize that. I am not appearing as your strict highway director or for Mayor Washington.
Senator CHILES. Are you appearing as a constitutional authority on the division of powers of the executive and legislative branches?
Mr. AIRIs. I think, sir, I would have to say that is a little beyond the AASHO—be a little presumptuous for me to appear as any part of a legal entity.
Senator CHILES. So when we get into these questions as to whether policy is within the executive or the legislative branch, your testimony doesn't really go to that?
Mr. ATRIS. No, sir, I don't think so.
Senator CHILES. As I understand your testimony, really what you are trying to tell this committee is the State highway officials have relied upon laws passed by this Congress and those laws haven't been carried out?
Mr. Airis. Yes, generally speaking, yes. We were given a job to do and they have worked at it consistently since 1966. The cutback has introduced an element that has created a lot of problems in performing the mission that was handed to us by the Congress, of course, in the original Highway Act.
Senator CHILES. And the law is kind of written out so you can read the law, but you never know what the cutback is going to be?
Mr. Airis. Yes. I pointed out to Senator Percy the similarity in running a freight train or as in the house when you turn a faucet on and get the faucet running—if you shut that faucet off real quick, you get water hammer all over the pipes in the house. In a big hydraulic system, that can even break up the system. It is that type of thing that these cutbacks are imposed in an arbitrary-maybe not arbitrary, but a manner that cannot be anticipated in cost.
For instance, steel' has to be ordered in some cases a year ahead. Right-of-way has to be ready. Concrete-cement for concrete has to be ordered and all of these things have to fit into a very, very complicated schedule. As they start and get these set up and funds are cut off and you have to cut back these things it is a long time before the State organizations of any kind can get them back in motion.
Senator CHILEs. Much of the State funds are set up on the basis of matching funds from the State sources and then other funds from local sources? Many times real property tax dollars, is it not a fact, would have to go for right-of-way acquisition and other things to make up the State's share?
Mr. AIRIs. Well, yes. In all cases, except with a very few exceptions. In certain areas there are matching funds and that has to be ready on the State's part to match the Federal funds and that is another element.
Senator CHILES. Does it give the State any problem in its financial planning of its tax picture because of these
Mr. ATRIS. Because of the cutbacks?
Mr. Arris. Well, I have Mr. Stafseth, who was the top man until a few months ago in the State of Michigan and he is well acquainted with that aspect of it. I might ask his opinion.
Mr. STAFSETH. Yes. I would be very glad to speak to this.
In the State of Michigan we had a situation where we accumulated about $60 million in our State funds which was basically ready to go on interstate and Federal projects. The embarrassment of the process was that our State legislature would say if you got $60 million why do you need more money, but we had no idea when the Federal funds were going to be made available.
I think your point and questions are very well put. When the cutbacks are made almost instantaneously without warning, and we have no idea when they will be released again, it is a very difficult proposition in a large State to plan the finances. We have some cases where some States even have gotten to where they are borrowing money and can be harmed by such a proposition.
Senator CHILES. So the Federal Government tells you when you pass a law, what you must do to comply with a program and what kind of funds you must put in, and we do that when we pass the law and then another part of the Federal Government holds back funds and leaves you hanging when you try to comply with the law?
Mr. STAFSETH. That is right, and it makes it very difficult because of the balances you hold in the State it is hard for the State legislature to look upon this and understand the problem. So it compounds itself.
I would like to point out one other difficulty with the highway director of Michigan. I had a situation where a veteran from the Korean war had a house which laid within the right-of-way of an interstate highway project that has been held up for many reasons, including the lack of funds, and he pleaded with me if we would hurry up and buy his property, build a highway so he could sell his home and move 80 miles closer to his job. The minute that we designate a highway right-of-way and it is held up for any reason it causes personal hardship on many people because it is hard to get rid of their property.
I know through the Federal highway administration we have developed some systems to better relieve these hardship cases, but that has been only in the last 2 or 3 years. So I guess that has been corrected partially. But the financial bind has not been corrected.
Senator CHILES. Senator.
Senator ERVIN. As I understand, the funds that were used for highway construction were passed, derived from taxes, imposed upon a special group of taxpayers and not upon taxpayers at large, namely, upon taxpayers who use the highways? Mr. AIRIS. Yes, sir.
Senator Ervin. They are collected under the law, they are put in a trust fund, and the law prescribes they cannot be spent for any purpose other than the construction and repair of highways?
Mr. AIRIS. Yes, sir. Mr. STAFSETH. I would like to mention the concept of the trust fund is the point I would like to make. Our funds are different than some of the other general fund programs. These were taxes collected to do a certain job just like you pay for your own electricity. The industry and highway departments were committed to carry out a program and without having dependable funds it makes it difficult.
Senator Ervin. I am sorry Senator Percy left because I have very different opinions on some subjects from those of his.
If you take the highway funds to build mass transit systems, then the next step you will take them to subsidize airlines, and then the