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Special Message to the Congress Urging Timely Action Regarding the Highway Trust Fund, Housing, and Wheat.

May 13, 1959

To the Congress of the United States:

In making my legislative recommendations in January of this year I called to the particular attention of the Congress three matters requiring urgent consideration and action. It is now some four months since I made these recommendations and to date the Congress has dealt finally with none of them. On one, it has taken no action at all.

These recommendations were as follows:

1. To avert a serious disruption of the Interstate Highway Program due to an impending deficit in the Highway Trust Fund, I recommended a temporary increase in the Federal tax on motor fuels;

2. To avoid the possibility of a serious interruption in homebuilding, I recommended an increased authorization for the insuring of home mortgages by the Federal Housing Administration;

3. To halt the accelerated build-up of surplus agricultural commodities and to reduce those stocks and their ever mounting cost to the taxpayer, I recommended corrective legislation.

Since these recommendations were made, time has grown steadily shorter and the problems occasioned by the lack of action in the Congress increasingly critical.

Highway Trust Fund

In setting up the Interstate Highway Program in 1956, the Congress provided that it be conducted on a "pay-as-you-go" basis and, to accomplish this purpose, established the Highway Trust Fund. Motor fuels and other highway user taxes are paid into this Fund, and Federal grants, amounting to 90% of the cost of building the Interstate Highway System, are paid to the States out of the Fund.

Legislation enacted last year, however, has increased the rate at which money is being spent from the Fund and nothing has been done to put more money into the Fund. Because the law wisely requires that the Fund's expenditures not exceed its receipts, it will be impossible this year, without Congressional action, to apportion funds so that the States may make commitments for future highway construction. Apportionments in the following year would also be far below those needed to carry forward the road building schedule now contemplated by law.

To keep the Highway Trust Fund on a "pay-as-you-go" basis and to maintain the planned construction schedule, I recommended a temporary increase of 1 1/2¢ a gallon in the Federal tax on motor fuels, effective July first of this year.

The recent suggestion that receipts from the manufacturers' excise tax on automobiles be earmarked for the Trust Fund is an unsatisfactory alternative. The transfer of those receipts, running about a billion dollars a year, from the general fund to the Highway Trust Fund would mean only that the problem would then be to raise new taxes to replenish the loss to the general fund.

An even more unsatisfactory alternative, proposed by some, would be legislation to waive the "pay-as-you-go" requirement. This would only be a refusal to face reality--one that the Congress would be hard put to explain. Less than three years ago, as a matter of legislative policy, the Congress declared in the Highway Revenue Act of 1956 that if it ever appears that the Trust Fund's total receipts will be less than its total expenditures "the Congress shall enact legislation in order to bring about a balance of total receipts and total expenditures."

Less than two months remain for timely, responsible action by the Congress on my recommendation.


In January I urged the enactment of emergency legislation to increase by $6 billion the Federal Housing Administration's authority to insure privately extended home mortgages.

This recommendation has not been enacted. The height of the homebuilding season is upon us, builders must plan ahead and the agency's insurance authority is in danger of being exhausted.

The $6 billion increase in authority involves no Federal spending and FHA's operations are self-supporting.

Because it could see that its authority was running out, the agency late last year, where it could, began issuing agreements to insure in the future provided it then actually had authority remaining. By thus substituting provisional agreements for actual commitments, the agency has been able to avoid an abrupt halt in its operations due to a lack of insurance authority.

Although the agency may be able to continue on this temporary basis until June thirtieth, the end of the fiscal year, the situation grows more precarious every day. The agency's outstanding agreements to insure in the future now exceed $3 billion, more than twice the amount of the agency's remaining authority to make actual insurance commitments.

To avoid the possibility of a serious interruption in home-building all across America, sound Congressional action in this area is urgently needed.


I have frequently requested legislation to deliver our farmers and taxpayers everywhere from the mounting failures and staggering excesses of the mandatory farm price support and production control program. Unless this pressing issue is squarely met and resolutely dealt with, the next few years will see the surplus problem, because of its staggering cost to increasingly frustrated and impatient taxpayers, crash of its own weight, carrying with it all that is sound and good in the support of agriculture by the Federal Government.

The most dramatic failure of all--and the problem requiring the most urgent attention--is the wheat program. Surplus wheat stocks are already two and one-half times our annual domestic consumption for food. By July 1 of next year these stocks are expected to reach 1.5 billion bushels and to involve an investment of $3.5 billion by the Federal Government. Wheat storage, handling and interest charges alone will cost the American taxpayer close to half a billion dollars in the next fiscal year. Final proof of the present program's utter failure to control production lies in the fact that the last wheat crop was the largest in history.

Because the Secretary of Agriculture is required by law to announce a continuation of this thoroughly discredited program by the fifteenth of May, in January I urgently recommended corrective legislation. The deadline set by law is now only two days away. No such legislation has been passed.

I understand that at this late hour the Congress has elected further to postpone its decision by briefly extending the deadline for announcing next year's wheat program. Having chosen this course, the Congress should use this added time to enact realistic and constructive legislation that will effectively avert the impending disaster in wheat.

I am compelled once again to call these particular matters to the special attention of the Congress because the orderly and efficient conduct of the people's business so requires. I urge the Congress to act expeditiously in these critical areas.


Dwight D. Eisenhower, Special Message to the Congress Urging Timely Action Regarding the Highway Trust Fund, Housing, and Wheat. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/234841

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