1959 Highway Trust Fund Revenue Bonding Proposal

1959 Highway Trust Fund Revenue Bonding Proposal

September 02, 2019  | Jeff Davis

This is a PDF file containing documents relating to the 1959 proposal to finance a shortfall in Highway Trust Fund revenues by the issuance of special revenue bonds, outside the regular Treasury Department borrowing, that would eventually be repaid by future Trust Fund tax revenues. This started out as a never-circulated idea from the Bureau of Public Roads in December 1958, was later introduced in the Senate by the ranking Republican on the Public Works Committee, and a version of it was approved by the Ways and Means Committee in lieu President Eisenhower’s requested gas tax increase. (White House and Senate opposition led Ways and Means to reconsider two weeks later, before they had ever filed a report.)

This PDF file contains 18 historical documents, in the following order:

1. December 11, 1958 draft memo (never sent) from Bureau of Public Roads to the Bureau of the Budget outlining a plan for the Highway Trust Fund to issue up to $6.2 billion in bonds that would not count against the public debt limit, to be repaid by extending current law Trust Fund excise taxes from their scheduled expiration in 1972 through 1977. (6 pages)

2. February 20, 1959 Bureau of the Budget staff memo memorializing a meeting with the Commerce Department at which the Bureau of Public Roads proposed HTF revenue bonds. (1 page)

3. February 24, 1959 Bureau of the Budget staff memo to the Budget Director criticizing the Public Roads bonding proposal. (3 pages)

4. March 3, 1959 memo from Commerce Under Secretary Allen to Commerce Secretary Strauss describing a March 2 meeting with Budget on the proposal. (1 page)

5. March 10, 1959 letter from Treasury Under Secretary Baird to Commerce Secretary Strauss in opposition to the bonding proposal, with a 1-page attachment of a Treasury staff memo from Henry Wallich describing the negative economic effects of the proposal. (2 pages)

6. March 13, 1959 letter from Federal Highway Administrator Tallamy to Budget Director Stans explaining the bonding proposal (with attachment) along with two cover routing slips from Budget officials on the same date. (7 pages)

7. March 27, 1959 memo from Budget Bureau staff to Budget Director Stans in opposition to the bonding proposal. (4 pages)

8. April 6, 1959 memo from Bureau of Public Roads to Commerce Under Secretary Allen saying that the Treasury analysis of the plan is wrong. (1 page)

9. April 7, 1959 letter from Budget Director Stans to Commerce Secretary Strauss giving the joint Budget-Treasury position in opposition to the plan. (4 pages)

10. April 9, 1959 memo from Commerce Secretary Strauss to Under Secretary Allen and Administrator Tallamy forwarding the Budget letter and asking for comments. (1 page)

11. April 14, 1959 memo from Under Secretary Allen to Commerce Secretary Strauss commenting on the original plan and the back-and-forth. (1 page)

12. May 7, 1959 memo from Administrator Tallamy to Secretary Strauss stating that Treasury and Budget’s analysis of the plan is in error, with cover memo to Under Secretary Allen. (3 pages)

13. June 11, 1959 memo from Commerce staff to Under Secretary Allen (attachment mentioned but not found in files). (2 pages)

14. Text of Senate Joint Resolution 109 (86th Congress), introduced June 16, 1959 by Sen. Case (R-SD) containing a $5 billion HTF revenue bonding provision drafted for him as technical assistance by the Bureau of Public Roads staff. (8 pages)

15. July 29, 1959 press release from the House Ways and Means Committee announcing that the panel had approved the issuance of $1 billion in HTF revenue bonds. (1 page)

16. July 30, 1959 confidential Ways and Means staff discussion draft of the legislation (7 pages)

17. Undated draft Ways and Means committee report explaining the revenue bonding bill (12 pages)

18. Bureau of the Budget summary of the bill approved by Ways and Means with a cover letter to White House legislative affairs head Bryce Harlow. (4 pages)

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