INDIVIDUAL VIEWS OF MR. PROXMIRE

While I support the need for an expanded mass transportation program, I believe the attention of the Congress should be drawn more specifically to the financing methods contained in S. 3154.

BACK DOOR SPENDING AUTHORIZED

Section 3(b) of the bill authorizes the Secretary of Transportation to obligate up to $3.1 billion in contract authority upon enactment without further recourse to the Appropriations Committees. A subsequent appropriation would be required to liquidate the obligation but the Congress would have little real choice since the full faith and credit of the United States would have already been pledged by the Secretary when he approved the contract. Thus, the contract authority form of financing shields the program from the annual appropriations process and reduces the ability of Congress to alter program priorities from year to year.

The main argument for the contract authority method of financing is that it is needed to assure the long-range Federal financial commitment to mass transportation which our local governments need if they are to upgrade their transportation systems. Of course, the same argument could be made for many other Federal programs including housing, model cities, air and water pollution control and education.

As important as mass transportation is, many feel that other Federal programs are of an even higher order of social priority. For example, the Report of the Kerner Commission recommended increased expenditures for job programs, education, housing, welfare, urban renewal, and model cities. Mass transit did not make the list.

If we are to resort to unusual back-door spending procedures for mass transit, an even more compelling case can be made to provide similar treatment for housing and model cities. The 1968 housing act establishes a 10-year goal of building 6 million units for low- and moderate-income families but nowhere do we provide a long-range financial commitment to this goal comparable to the commitment which S. 3154 makes to mass transit.

If Congress approves 5-year contract authority for the mass transit program, we can expect to make similar commitments for other socially urgent programs. Thus, Congress may gradually relinquish control over spending priorities as a greater percentage of our general tax revenues are encumbered by programs which bypass the annual appropriation review.

TRUST FUND NEEDED

Although I question the wisdom of tying up our future general revenues for specific programs, the objection applies less to trust fund revenues when the revenues are specifically related to the program which it finances.

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To the extent that the beneficiaries of a program can be identified and assessed through user charges, a good case can be made for the revenues to be held in trust and allocated specifically to the program in question.

In discussing alternative financing methods, the committee report says nothing about a trust fund approach nor about allocating a portion of the Federal excise tax on gasoline for mass transit purposes. I believe a particularly good case can be made for financing the mass transit program out of gasoline tax revenues which heretofore have been used exclusively for highways. The beneficiaries of mass transit expenditures are not only the riders who pay a fare, but also auto motorists who benefit from reduced congestion and who pay nothing. For example, the Department of Transportation estimates the economic benefit to motorists not using the proposed Washington mass transit system will total $500 million compared to a required Federal contribution of $600 million. Gasoline tax revenues are thus a fair and equitable way of financing Federal mass transportation invest

ments.

Establishing a mass transit trust fund based on gasoline tax revenues would have the following advantages:

(1) Communities would have a more balanced transportation program between highways and mass transit. Each community could establish its own priorities;

(2) Communities would have a more stable and assured method of financing mass transit compared to the contract authority method;

(3) The impact on taxpayers would be less since part or all of the increase in mass transit expenditures can be accommodated through reductions in highway expenditures.

On January 5, 1969, President Nixon's task force on mass transportation recommended that "the creation of a public transportation trust fund is urged to revitalize urban mobility in the same way as the highway trust fund has improved interstate transportation."

I agree with this recommendation and I am disappointed that the administration and this committee chose to depart from it. To the extent the contract authority method is effective in providing assured financing, it weakens congressional control over general revenues. To the extent it is ineffective, it raises false hopes about the extent of the Federal Government's financial commitment. A trust fund approach would obviate these two dangers.

INCREASE IN GRANTS TO ONE STATE

Under the present law, capital grants to any one State cannot exceed 122-percent of the total authorization. The Secretary also has discretionary authority to approve an additional $12.5 million over and above the 121⁄2-percent ceiling. The purpose of the discretionary authority is to afford flexibility to those States approaching the 121⁄2percent ceiling and whose ongoing projects threaten to exceed the 121⁄2percent ceiling because of unforeseen cost increases.

Under section 5 of S. 3154, the 12%1⁄2-percent ceiling would be maintained but the discretionary authority to exceed the ceiling would be

increased from $12.5 million to a sum equal to 15 percent of the total authorization. This comes to $465 million, or a 37-fold increase over the present authority.

Given the $3.1 billion authorized by S. 3154, any one State could not receive more than 12-percent or $387 million. With the long lead time involved between commitments and actual outlays, a State could not possibly hope to approach the $387 million expenditure ceiling for several years. Thus, it is not clear why any discretionary authority to exceed the 12-percent ceiling is needed at all, and it certainly is not clear why a 37-fold increase is needed unless the Department knowingly intends to exceed the ceiling from the outset of the program.

The $465 million discretionary fund would allow one State to receive up to 271⁄2-percent of the authorization. Moreover, if the actual appropriations fell short of the full authorizations, the percentage of funds going to a single State could be even higher.

The huge increase in discretionary authority authorized by S. 3154 is really tantamount to a de facto increase in the 12%-percent State limitation to the benefit of a few large States and at the expense of all other States. If this is the intent, the increase ought to be effected directly. If the intent is merely to provide administrative flexibility, the amount is grossly excessive and clearly unnecessary for the first several years of the program.

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Despite the existing 122-percent limitation, the mass transit program to date has benefited only a few States. For example, as of June 30, 1969, six States with 31.9 percent of the population received $478 million, or 76.2 percent of the total $628 million allocated. Put another way, 44 States with 68.1 percent of the population received only 23.8 percent of the funds. Moreover, 34 of these States received less than $1.5 million each during the entire 5-year life ot the program One reason why the funds have not been more equitably distributed is that many of our smaller and medium sized communities rely upon private transit systems rather than public transit. Since it is exceedingly difficult for private transit systems to obtain assistance under the program, the smaller and medium sized communities are discriminated against.

S. 3154 attempts to improve the situation by making it possible for private transit companies to obtain capital grants through the appropriate local public agency. While this provision should help restore the present inbalance in the program which favors a few States, the increase in the discretionary authority from $12.5 million to $465 million will have exactly the opposite effect. It will further increase the amount of funds going to a few States at the expense of the vast majority of States with the overwhelming bulk of the population and with equally pressing transportation problems.

For example, if the $465 million in discretionary funds were allocated to just one State, that State could receive 272 percent of the total authorization. If the $465 million were allocated to two States, those States could each get 20 percent of the total authorization and a combined total of 40 percent. Likewise, three States could each get 171⁄2 percent for a combined total of 52.5 percent of the total authori

1 The six States were New York, New Jersey, Connecticut, Massachusetts, Illinois, and California.

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zation; and four States could get 16.25 percent each for a combined total of 65 percent of the total authorization.

The discretionary authority would only be necessary if the State exceeded the 1212 percent limitation. Hence, it is obvious that only a few States, most likely three or four, would stand to benefit from the $465 million discretionary authority. I offered an amendment in committee to delete the authority for exceeding the 1211⁄2 percent ceiling. The amendment failed by voice vote. As a result, it is likely that most of the $3.1 billion authorization will go to a few States at the expense of the vast majority of remaining States.

WILLIAM PROXMIRE.

INDIVIDUAL VIEWS OF MR. CRANSTON

No one seriously doubts that our Nation is in desperate need of a federally aided public transportation system.

Last August, President Nixon, in a message to Congress, showed that he appreciates the magnitude of the transportation crisis facing the country when he proposed that $10 billion be made available over a 12-year period to meet the Nation's public transportation needs.

At that time I expressed my disappointment that the President did not adopt the trust fund method of financing to provide the necessary funds.

It is clear that without a trust fund we could not and would not have built badly needed highways in our country.

With this in mind, I introduced in the Senate legislation to set up a trust fund to finance the Nation's mass transit needs.

As a Senator from the Nation's most populous State, I am painfully aware of the transportation crisis facing the urban, suburban, and rural communities.

Across our country, we must immediately develop alternatives to our total reliance on the automobile.

Ever-spreading highway systems have enmeshed our cities and countryside in coils of concrete and exhaust fumes.

Meanwhile, public transportation systems throughout the country are virtually nonexistent. Public transportation dwindles yearly into economic oblivion, a vanishing species of abandoned trolley cars and bankrupt buslines. Innovative proposals are being rejected from Atlanta to Los Angeles by the already severely over-taxed local property owners.

I am deeply concerned about outgrowing dependence on the internal combustion engine which proliferates our alarming environmental pollution, the dangers of which we are finally beginning to understand. To keep the atmosphere of our cities breathable, we must find better ways to move our people through them. When our cities can seriously consider banning automobile travel during smog alerts, it is ineonceivable that our planning for an alternative transit system should be undeveloped.

Moreover, it is becoming increasingly clear, that if we, as a nation, are serious about revitalizing our cities and improving living conditions for millions of Americans who now reside there, the development of an adequate public transportation system is essential.

There is a particular need, too, in urban areas where jobs are not filled simply because the residents of the core city have no reliable and inexpensive means of transportation to those jobs.

The need for adequate Federal financial assistance in the establishment of a viable public transportation system is absolutely crucial. Over the years the leading advocate in the Senate for such assistance has been Senator Harrison Williams of New Jersey, and I heartily (38)