Oregon contributions, 1962, under sec. 103 of the Federal Fair Election For the Nation as a whole in 1962, based on the total votes in the 1958 and 1960 campaigns, the following figures are estimated to apply: Estimated Federal contributions in 1962 under sec. 103 of the Federal Fair Total vote, 1958, House of Representatives___. Average vote, 1958 and 1960___ General contribution formula (0.05Xaverage vote on the basis 45,718, 994 64, 124, 310 109, 843, 304 54, 921, 652 $5, 492, 165. 20 37, 479, 463 33, 661, 010 71, 140, 473 35, 570, 236 $3,557, 023. 60 $9,049, 188. 00 The third Federal contribution to candidates is for campaign correspondence. For candidates for Congress from urban areas, even with the assistance to broadcasting provided for under this bill, it is probably not economical to buy radio and television time. Many candidates from such areas have found that the optimum method for approaching a great number of people is through direct mail. Because this is such an important means of communication, provision is made for a number of envelopes to be provided to the candidate by the Director for campaign correspondence. The number of envelopes would be determined by the average vote calculated as in the previous section. Such envelopes, and the campaign correspondence in them, would be transmitted postage free, with either the seal of the Director or some appropriate wording in the upper right-hand corner of the envelope. There would be a 4-ounce limit on this mail, as on franked mail. Such a provision would be particularly helpful in making certain that recent problems involving the use of the frank by a Maryland Congressman and two New York Congressmen do not recur. When candidates quibble over whether the contents of an envelope was truly material that should be franked, valuable time is taken from the discussion of the important issues that voters have before them. I would like to present for the consideration of the subcommittee a recent letter from the General Counsel of the Post Office Department to Honorable Tom Murray, chairman of the Post Office and Civil Service Committee of the House of Representatives, in which the Post Office's position on franked and political mail is set out in detail and I would like to submit this to be entered in the testimony. Senator CANNON. Without objection. (The letter referred to may be found on p. 105.) Senator NEUBERGER. Total cost of S. 1555 provisions for campaign correspondence for 1962, using average of total votes in 1958 and 1960: Candidates for House of Representatives. Total correspondence cost---- $4, 349, 794 2,817, 162 7, 166, 956 I think that the committee would be interested in two hypothetical examples I have prepared with regard to how S. 1555 would operate in two Oregon congressional districts in the 1962 campaign. I have chosen two districts that are very dissimilar in nature, the Third and the Second. The Third Congressional District is basically urban, centered around Portland in Multnomah County in the northwestern portion of the State. It has 291,000 voters in one county. The Second District is rural in nature. It covers the entire eastern part of Oregon, farming and wilderness country. In 18 counties, covering a total of 65,000 square miles, there are 127,000 registered voters. The Federal contributions for each candidate under S. 1555 are as follows: You are going to have a question about that figure of $4,825 for the Third Congressional District, I know. So much for contributions to candidates and their campaigns. I have discussed broadcast time, general expenditures, and campaign correspondence. Now, let us turn to the safeguards in this measure. At the outset, let me say that these conditions are not inserted to discourage the formation of new political parties. Rather, they are in the bill to make certain that there is no wholesale biennial raid on the Treasury in the name of election financing. First, a candidate must name a financial agent. This is important, for responsibility for the honesty and accuracy of the reports filed rests on both the candidate and his financial agent. Second, a candidate must agree that he will expend no more money from private sources than equal to the amount that he will be entitled to under the act. Third, a candidate must agree to limit any gift, loan, or other contribution of property to not more than $100. This, of course, is a vital provision. It is this specific condition that will limit the amounts that a candidate may receive from any individual. The evils attendant on reliance on a few contributors of large sums have already been cataloged. Fourth, a candidate will have to post a bond, payable to the United States, equal to one-half the amount of the Federal contribution under this title. It is conditioned on the candidate's receiving 10 percent of the total vote for the office. A candidate receiving less than 10 percent of the votes will forfeit the bond. Fifth, a candidate must file with the Director a report showing his compliance with the applicable laws and regulations. This report must contain an account of all expenditures in the candidate's campaign. Finally, if the Director determines that there has been an expenditure or contribution in excess of the limits set forth, the amount of the Federal contribution will be reduced by a like sum. Title II, State voters' pamphlets: One of the most effective and informative campaign materials I have seen is the Oregon voters' pamphlet. For more than a quarter of a century, this pamphlet has provided a brief background summary of the various candidates for public office. Oregonians have found this a consistently useful publication. Title II of S. 1555 would provide for the Federal Government to pay, on a matching basis, one-half the cost of the preparation, printing, delivery, and distribution of such a pamphlet for any other State that would undertake such a project. To qualify for the Federal contribution, the publication would have to be "official"-that is, issued by or under the control and supervision of the State. It would have to be distributed free of cost, and it would have to make space available to candidates on an equal basis. Title III, Office of Election Finance: Title III of S. 1555 establishes an Office of Election Finance to administer the provisions of this act. It would be independent of the executive branch of the Government, headed by a Director and a Deputy Director. Each would serve for 15 years, and be appointed by the President with the advice and consent of the Senate. As I envision the responsibilities of the Office, it would be more than administering the provisions of the act in a peak of frenzy every other year. While I admit that activity will increase during election years, I feel that there is a substantial educational job that can be done during the odd-numbered years. Students of politics, and politicians themselves (when they are not the same people) have long complained over the inadequacy of our information relative to financing elections. The reports filed with the Clerk of the House of Representatives and with the Secretary of the Senate are so absurd as to be meaningless. This is not necessarily because the candidates themselves are dishonest. Rather, the law is so loosely drawn that compliance with it is in fact no accurate disclosure at all. I would think that the Director, and the Deputy Director, in addition to being hardheaded, practical administrators, would have to understand the importance of the data that they accumulate, both to students and to the public in general. And it would be my hope that they would carry out a continuing campaign for further public information, education, and interest in the question of political financing. Title III contains a number of other provisions dealing with retirement annuities for the Director and Deputy, applicability of civil service laws, and the promulgation of regulations. One of these, however, is of more than passing import. That would permit the Director, on his own motion, to investigate statements made under this act. This enforcement tool would help make certain that the Federal contributions discussed before would not be abused. Violations of the law will be reported to the Attorney General. So far, I have spoken of the Federal contributions to the cost of campaigning, and of the Director of the Office of Election Finance. However, I would not want to leave the impression that I oppose private campaign contributions. I am the first to agree that they have worked. Indeed, none of us would be here had they not. My point is that there is a better system available, and this is what I advocate. For some years now, both political parties, with the enthusiastic support of the American Heritage Foundation and the Advertising Council, have been trying to expand the base of their financial support. In plain language, this means that they would like more people to give just a little bit of money to campaigns. I think I should add one point, and that is with respect to a tax credit. Giving money to a campaign has a twofold purpose. On the one hand, it adds to the campaign exchequer. As such, it can be used for the myriad of campaign functions I have mentioned. Of almost equal importance, however, but almost ignored is the fact that a campaign contribution represents a sense of active participation and interest on the part of the donor. Because of the desirability of encouraging more people to participate in campaigns, title IV of S. 1555 provides for an income tax credit of up to $10 for political campaign contributions. I think I should mention the reasoning behind a provision that would allow a tax credit, and not a deduction. Because of the graduated nature of the income tax, a deduction is of greater benefit to a person in a high tax bracket than it is to a taxpayer in a lower bracket. To equalize the tax benefit of a contribution, a credit is provided. Under the provisions of the bill, the director will ascertain that only the contributor takes advantage of the credit. The annual maximum cost to the Treasury will be $10 times the number of contributors. However, for contributors below $10, a matching credit only is permitted. Mr. Chairman, I have presented in quite extensive detail the justifications for, and the provisions of S. 1555. I do not, however, wish to imply that my views on the minutiae of this bill are inflexible. Rather, I discussed them to point out that this proposal is both reasonable and workable. More important than the details is the principle that this bill would establish, if passed. It is basically the principle of a positive, affirmative approach on the part of the Government with respect to an effective political process. It says that in the middle of the 20th century, the people of this country have an interest in a political dialog-an interest great enough to be willing to support it. It is perhaps mundane to observe that as our responsibilities as a Nation grow, so does our responsibility to make a wise choice among the candidates who seek to serve us. If it is true, as I believe it is, that a better informed electorate will be able to choose its representatives more wisely, and if it is true that an electorate will not be well informed when the candidates seeking to present political alternatives have no access to it, then the need for provisions of this bill are obvious. If we can release our candidates for public office from the reliance on political fat cats; if we can insure that each judgment made is not the political payoff for a campaign debt, but the reasoned conclusion of an independent mind and spirit; if we can make the political dialog of each crucial election readily available to all citizens; and if we can insure that service to the United States in the House or the Senate or the White House is not limited only to men of wealth, then I think we have taken a substantial stride forward in perfecting our democracy. Senator CANNON. Thank you very much, Senator Neuberger. I am sure that the committee will have a number of questions for you. I have a few here that I have outlined myself that I would ask you to consider. Now, in section 102 your bill provides that the candidates and those working on his behalf may purchase additional raido and TV time but not to exceed an amount equal to that which would be provided under the Federal contribution. Is there any way that you can foresee in your bill in which to prevent individuals or committees, supposedly not directly connected with the candidate's campaign, from purchasing excess radio or TV time, either one, and using it in behalf of the candidate? In other words, we are getting into this problem of authorized and unauthorized committees. Senator NEUBERGER. There is no better answer than the old statement that, "I can take care of my enemies, but protect me from my friends." I doubt if anybody who has run for office has not encountered the experience of having somebody take out some advertising or some radio time for you that you did not authorize. I would think that in order to prevent abuses, that you would have to say that you would have to have cooperation from the broadcasters, the television and radio stations, but there could be definite abuses of the plan unless there was some provision to handle that, I would think. I mean, anybody could easily see how abuse could take place there, and I would think that you would have to police that very carefully, definitely. Senator CANNON. Section 103 of the bill provides for Federal contributions to general expenditures in an amount not exceeding 5 cents, multiplied by the average vote of the State or district. Now, if the candidate elects to use all or most of this money for general expenses to purchase additional broadcast time, would he then be violating section 102 of the bill? Senator NEUBERGER. Yes. It is definitely meant here that people have equal time for radio and television. I would favor an amendment, if you feel that it is not clear, to see that the money provided under the general expenditures formula is not used for broadcast time. Senator CANNON. Will the setup for the Director of Election Finance enable him to ascertain for each candidate for Federal office across the country a precise calculation of the maximum Federal contribution to each candidate without some difficulty? Senator NEUBERGER. I think so, yes. It might be difficult at first, but I think he can. |