Help for Highways

Through the House Ways & Means Committee last week rode a bill to save the nation's $41 billion, 41,000-mile highway-building program from skidding to a halt. The committee, which ten times has vowed never to boost the federal gasoline tax, changed its mind; it approved a 1-c- hike to 4-c- a gallon, effective for 22 months from Sept. 1 to June 30, 1961. The lopsided vote (16 to 9) marked a partial victory for the Administration; it has championed a fiveyear, 1 1/2-c- boost, bucked a congressional bond-floating plan that would have added huge interest charges, increased vastly the cost of the program. Both Congress and the Administration are expected to accept the Ways & Means compromise.

Approval could not come too soon. With little more than 4,700 miles of interstate roads finished so far, highway funds have run so low that contract awards or advertising for bids have been stopped by 24 states from Maine to Washington, including New York, Ohio, Missouri, California. These states pressured Congress to bow to the President's proposed tax boost, in the face of the oil industry that lobbied hard against it. The penny tax will raise about $960 million. After it expires in mid-1961, the compromise bill would earmark $2,445 billion from present taxes on autos and parts to the highway program from fiscal 1962 through 1964.

The taxes will increase federal fund allocations to the states to $1.8 billion in fiscal 1961, and $2 billion in fiscal 1962. Even so, the 1961-62 total will fall $600 million short of the $4.4 billion originally programmed for both years, is expected to slow the building schedule by six months. But the very fact that cash is ready to flow again will permit the states to resume contract awards, give a fresh lift to the construction industry in the next few months.

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