July 22, 2016

A Presidential decision to sign into law a bill that everyone loves is not remarkable. The more interesting stories are when the President’s advisors are split, with some supporting the bill and others recommending a veto. The 1958 highway bill was one such piece of legislation.

Today’s document from the Eisenhower Presidential Library is the “enrolled bill” file on the bill H.R. 9821 of the 85^th Congress, the “Federal-Aid Highway Bill of 1958.”

In an effort to combat a sudden but extremely sharp economic recession, the 1958 highway bill added an extra $800 million in interstate highway construction contract authority over FY 1959-1962. It also provided a one-time shot of new contract authority for non-interstate roads of $400 million, at an unusual 2 to 1 federal cost share instead of the traditional 50-50 federal-state split – and if states could not find their matching money immediately, the federal government would loan it to them. The House passed the final conference report version of the bill by a vote of 300 to 28 and the Senate cleared the bill for the White House by voice vote.

The White House’s Bureau of the Budget recommended a veto, writing that “the provisions of the bill which purport to use the highway program as a method of stimulating economic recovery are so unwise as to justify disapproval of the bill.” And the Commerce Department, in which the Bureau of Public Roads was housed at the time, also recommended a veto, writing that “the increased authorizations would be felt too late to be of significantly greater assistance than proposals of the Administration in combatting the Nation’s current economic problems, could have a serious and unavoidable inflationary impact on the economy, and would disrupt the orderly and balanced nature of the Nation’s highway program.”

(Interestingly, on the cover page of the enrolled bill file, President Eisenhower’s own handwriting indicates that the Secretary of Commerce later “changed his mind” but there is no other paper trail in the file to indicate that.)

The chairman of the Council of Economic Advisers recommended that the President sign the bill: “The legislation contains certain undesirable features but these are not, as we see it, sufficiently serious to warrant a veto of the bill by the President.” And John S. Bragdon, the President’s special advisor for public works, wrote that while the departure from the 50-50 nature of the non-interstate highway program was “not wise,” it could be overlooked “Since this is the biennial Federal-aid highway bill, the foregoing is not considered grounds to justify a veto but it is believed the undesirable characteristics pointed out above could well be mentioned in the approval message.”

Capitol Hill was also consulted. On April 15, 1958, the President hosted the regular meeting between Administration principals and the Congressional Republican leadership. At the time, the last day for the President to veto the bill without it becoming law on its own was the next day, April 16. According to the minutes of that meeting, “The President spoke at length on how this legislation violated established principles through its two-to-one ratio for State and local roads, along with the prospect of loans to the States that might even be remitted prior to payment. In the lengthy discussion that followed, the President stressed the unprincipled nature of this and the importance that he attached to maintenance of principle as the basis of Republican strength.”

But the House and Senate Republican leaders, Rep. Charlie Halleck (R-IN) and Sen. William Knowland (R-CA) both suggested that this bill was as good as the President was going to get from Congress, with Halleck emphasizing the temporary, one-time nature of the two-to-one matching funds. The President “added that he might be able to bring himself to approving even this if he could have any hope of correcting the ratio.”

The highway bill also benefitted from the fact that the President on April 15 had already vetoed the water resources bill (S. 497, 85^th Congress), so the President had just proven his spending-restraint bona fides and did not necessarily need to follow that veto up with a highway bill veto the following day.

In the end, President Eisenhower signed the highway bill into law. Following Bragdon’s advice, he issued a signing statement critical of the bill, which then became Public Law 85-381. (Congress did not challenge the veto of the water resources bill.)

The increased funding authorizations in the 1958 bill soon prompted the Highway Trust Fund’s first funding crisis, which led to the 1959 gas tax increase (but that is a story for another day).

(Photo courtesy: Chicago Tribune Archives)