Presidential campaign financing, I pose for your consideration and exploration a series of alternatives.

In 1961, President Kennedy appointed a distinguished, bipartisan Commission on Campaign Costs to take a fresh look at the problems of financing election campaigns. Although the Commission devoted its attention to the problems of campaign costs for Presidential and Vice Presidential candidates, it pointed out that the measures proposed "would have a desirable effect on all political fund raising." The Commission's 1962 report and recommendations were endorsed by Presidents Dwight D. Eisenhower and Harry S. Truman as well as leading Presidential candidates in recent elections.

Based on the Commission's recommendations and the later reviews and studies of campaign financing, there are several alternatives which should be considered. These alternatives all involve public financing of campaigns to a greater or lesser extent. Among them are:

-A system of direct appropriations, patterned after the recommendations made herein for Presidential campaigns, or modeled after recommendations pending in the Congress.

-A tax credit against federal income tax for 50 percent of contributions, up to a maximum credit of $10 per year.

-A matching incentive plan in which the government would contribute an amount up to $10 for an equal amount contributed by a citizen, whether or not a taxpayer, to a candidate or committee.

-A "voucher plan" in which Treasury certificates for small amounts could be mailed to citizens who, in turn, would send them to candidates or committees of their choice. These vouchers could then be redeemed from public funds, and the funds used to defray specified campaign expenditures. I believe these deserve serious attention along with other proposals previously recommended and suggested to the Congress. Each alternative offers particular advantages. Thorough review may reveal that one is to be clearly preferred over the others, or that still other courses of action are appropriate. Whatever the outcome, any such review should reflect a realistic assessment of the amount of funds needed in these campaigns and the extent to which the funds should be provided by public means.

I recommend that Congress undertake such a review.

I have asked the Secretary of the Treasury and the Attorney General to cooperate fully with the Congress in its exploration of these alternatives in order to give all the help the Executive Branch can to the Congress as it seeks the best congressional election campaign financing program.

These recommendations represent my thoughts on the issues at stake. I believe they highlight the problems in an area so new and complex that there is little experience in our national life to guide us.

I hope that these proposals will serve as guidelines for discussion and debate in the coming weeks. A penetrating and orderly review of these vital public issues, with all the wisdom that the Congress can summon, will in itself be an important educational process for the nation in the art of government and politics.

I hope that Congress will proceed to consider promptly the problem of campaign financing and will enact appropriate legislation.

I make no recommendation as to the effective date with respect to such legislation. I leave that entirely to the judgment and wisdom of the Congress. I have no desire to ask that the provisions be made applicable to any campaign in which I may be involved. On the other hand, I have no desire to request that any such campaign be exempted from modernizing legislation which Congress might enact. Public financing of political campaigns presents the American people with an issue that is both significant and complex-departing as it does from the familiar practices of the past. It transcends partisan political considerations. I urge the American people and the Congress to consider this issue thoughtfully, on its merits, and on the highest and most objective plane, independent of any personalities now in office or seeking office.

IV.

STRENGTHENING FEDERAL REGULATION OF LOBBYING

Full disclosure can serve the integrity of government in another important area-the regulation of lobbying.

Lobbying dates back to the earliest days of our Republic. It is based on the constitutionally guaranteed right of the people to petition their elected repretatives for a redress of grievances.

Yet to realize the American ideal of Government, our elected representatives must be able to evaluate the varied pressures to which they are regularly subjected. In 1946, Congress responded to this need by enacting the Federal Regulation of Lobbying Act. Its purpose was not to curtail lobbying but to regulate it through disclosure. For the first time, individuals and groups who directly attempted to influence legislation were required to register.

More than twenty years of experience with the Act have highlighted its flaws. Through loopholes in the law, immune from its registration provisions, have passed some of the most powerful, best financed and best organized lobbies. Although engaged in constant and intensive lobbying, they are not legally required to disclose their existence-because lobbying is not their "principal" purpose, the narrow test under current law.

The Congress has properly taken the initiative to meet this problem. Two months ago, the Senate passed S. 355 by a decisive vote. In that measure, Federal regulation of lobbying has been strengthened by:

-Supplanting the "principal purpose" test with the broader test of "substantial purpose," thus extending the reach of the Act by a wider definition of those required to register.

-Transferring the responsibility for administration of the law from the Clerk of the House and the Secretary of the Senate to the Comptroller General.

I strongly endorse the Senate's action in strengthening Federal regulation of lobbying as an important step toward better Government, and I urge the House to take similar action.

V.

THE RESIDENCY VOTING ACT OF 1967

Voting is the first duty of democracy. H. G. Wells called it, "Democracy's ceremonial, its feast, its great function."

This Nation has already assured that no man can legally be denied the right to vote because of the color of his skin or his economic condition. But we find that millions of Americans are still disenfranchised-because they have moved their residence from one locality to another.

Mobility is one of the attributes of a free society, and increasingly a chief characteristic of our Nation in the 20th Century. More American citizens than ever before move in search of new jobs and better opportunities.

For a mobile society, election laws which impose unduly long residence requirements are obsolete. They serve only to create a new class of disenfranchised Americans.

An analysis of the 1960 election, the last election for which studies are available shows that between 5 and 8 million otherwise eligible voters were deprived of the right to vote because of unnecessarily long residency requirements in many of the states. Almost half the states, for example, through laws a century old, require a citizen to be a resident a full 12 months before he can vote even in a Presidential election.

}

These requirements diminish democracy. The people's rights to travel freely from State to State is constitutionally protected. The exercise of that right should not imperil the loss of another constitutionally protected right-the right to vote. I propose the Residency Voting Act of 1967 which provides that a citizen, otherwise qualified to vote under the laws of a state, may not be denied his vote in Presidential election if he becomes a resident of the state by the first day of September preceding the election.

VI.
CONCLUSION

Seventy years ago, the great American historian Frederick Jackson Turner wrote these words:

"Behind institutions, behind constitutional forms and modifications, lie the vital forces that call these organs into life and shape them to meet changing conditions. The peculiarity of American institutions is the fact that they have been compelled to adapt themselves to the changes of an expanding people

This represents a valid exposition of the vitality of our democratic process as it has endured for almost two hundred years.

Over those two centuries Presidents and Congresses have strengthened that process as changing circumstances presented the clear need to do so. History has spared few generations that continuing obligation.

Today, that obligation poses for us the requirement-and the opportunity as well--to bring new strength to the processes which underlie our free institutions. It is in keeping with this obligation that I submit the proposals in this Message. LYNDON B. JOHNSON.

THE WHITE HOUSE, May 25, 1967.

[Press release, Committee on Finance, U.S. Senate, May 25, 1967.]

RUSSELL B. LONG, (D., La.) CHAIRMAN, COMMITTEE ON FINANCE, ANNOUNCES HEARINGS ON POLITICAL CAMPAIGN FINANCING PROPOSALS

Chairman Russell B. Long today announced that the Committee on Finance would begin hearings on Wednesday, May 31, 1967, at 2:30 P.M., in Room 2221 New Senate Office Building, into methods of financing campaigns for political office.

The Chairman stated that the President's recommendations for election reform have been submitted to the Congress and that these recommendations would be the focal point for the hearing. Copies of the President's message are available at the Committee office upon request. He also indicated that a number of Senators had introduced various proposals of their own to provide better means of financing political campaigns than exist today. He said the Committee would receive testimony on these additional measures as well. The bills before the Committee include S. 786 by Senator Scott, S. 1390 by Senator Metcalf, S. 1407 by the Chairman, S. 1547 by Senator Clark, S. 1698 by the Chairman, S. 1794 by Senator Pearson, and S. 1827 by Senator Gore.

The Chairman reported that the lead-off witness at these hearings would be Under Secretary of the Treasury Joseph W. Barr, who would present the case for the President's recommendations. Hearings will continue on Thursday, June 1, with Elmer B. Staats, Comptroller General of the United States, as the first witness. The Comptroller General is the Federal officer charged with responsibility for administering the Presidential Election Campaign Fund Act of 1966. Persons desiring to be heard on this important matter should submit requests to Tom Vail, Chief Counsel, Committee on Finance, not later than Friday, June 2. In order to facilitate the hearing, those with similar interests should designate a single spokesman to present their testimony. As soon as the hearing schedule is fixed, witnesses will be advised of their time of appearance, and a full witness list will be announced. A

Witnesses who are scheduled to appear are urged to make their statements as brief as possible to conserve the time of the Committee. In order to further conserve time, the Committee will be pleased to receive from any interested person a written statement for inclusion in the printed record of the hearings in lieu of a personal appearance. These statements will be given the same full consideration as though they had been delivered orally. Chairman Long urged those persons who desire to contribute written statements to submit them to Tom Vail, Chief Counsel, no later than Friday, June 9.

All statements should include a summary sheet and subject heading and should be received in the Finance Committee office the day prior to scheduled appearance.

[S. 786, 90th Cong., first sess.]

A BILL To amend the Internal Revenue Code of 1954 to allow an income tax credit for contributions may by individuals to the National and State committees of political parties, and to repeal the Presidential Election Campaign Fund Act of 1966

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1954 (relating to credits against tax) is amended by renumbering section 40 as 41, and by inserting after section 39 the following new section:

"SEC. 40. CONTRIBUTIONS TO NATIONAL AND STATE COMMITTEES OF POLITICAL PARTIES.

(a) GENERAL RULE.-In the case of an individual, there shall be allowed, as a credit against the tax imposed by this chapter for the taxable year, an amount equal to one-half of so much of the political contributions as does not exceed $200, payment of which is made by the taxpayer within the taxable year. "(b) LIMITATIONS.—

"(1) APPLICATION WITH OTHER CREDITS.-The credit allowed by subsection (a) shall not exceed the amount of the tax imposed by this chapter for the taxable year reduced by the sum of the credits allowable under section 33 (relating to foreign tax credit), section 35 (relating to partially tax-exempt interest), section 37 (relating to retirement income), and section 38 (relating to investment in certain depreciable property).

"(2) VERIFICATION. The credit allowed by subsection (a) shall be allowed, with respect to any political contribution, only if such political contribution is verified in such manner as the Secretary or his delegate shall prescribe by regulations.

"(c) DEFINITIONS. For purposes of this section

"(1) POLITICAL CONTRIBUTION.-The term 'political contribution' means a contribution or gift to

"(A) the National committee of a qualified political party, or

"(B) the State committee of a qualified political party as designated by the National committee of such party.

"(2) QUALIFIED POLITICAL PARTY.-The term 'qualified political party'

means

"(A) in the case of contributions made during the taxable year of the taxpayer in which the electors of President and Vice President are chosen, a political party presenting candidates or electors for such offices on the official election ballot of 10 or more States, or

"(B) in the case of contributions made during any other taxable year of the taxpayer, a political party which met the qualifications described in subparagraph (A) of this paragraph in the last preceding election of a President and Vice President.

"(3) STATE.-The term 'State' includes the District of Columbia, the Commonwealth of Puerto Rico, and the possessions of the United States. "(d) CROSS REFERENCE.

"For disallowance of credit to estates and trusts, see section 642(a) (4)."

(b) The table of sections for such subpart A is amended by striking out the last item and inserting in lieu thereof the following:

"Sec. 40. Contributions to National and States committees of political parties.
"Sec. 41. Overpayments of tax."

(c) Section 642(a) of the Internal Revenue Code of 1954 (relating to credits against tax for estates and trusts) is amended by adding at the end thereof the following new paragraph:

"(4) POLITICAL CONTRIBUTIONS. An estate or trust shall not be allowed the credit against tax for political contributions provided by section 40." (d) The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act but only with respect to political contributions payment of which is made after such date.

SEC. 2. (a) The Presidential Election Campaign Fund Act of 1966 is repealed. (b) (1) Subchapter A of chapter 61 of the Internal Revenue Code of 1954 is amended by striking out part VIII (relating to designation of income tax payments to Presidential Election Campaign Fund).

(2) The amendment made by paragraph (1) shall apply with respect to income tax liability for taxable years ending after the date of the enactment of this Act.

[S. 1390, 90th Cong., first sess.]

A BILL To establish a procedure whereby all candidates for elective Federal office may receive financial assistance from the Treasury to assist in defraying their election campaign expenses, and to repeal the Presidential Election Campaign Fund Act of 1966

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SHORT TITLE

SECTION 1. This Act may be cited as the "Federal Elections Campaign Financing Act of 1967".

79-540-67--2

AMENDMENT TO INTERNAL REVENUE CODE

SEC. 2. (a) Part VIII of subchapter A of chapter 61 of the Internal Revenue Code of 1954 is amended to read as follows:

"PART VIII-VOUCHERS REDEEMABLE FOR FEDERAL ELECTION CAMPAIGN EXPENSES

"Sec. 6096. Furnishing of vouchers to taxpayers.

"SEC. 6096. FURNISHING OF VOUCHERS TO TAXPAYERS.

"(a) CONGRESSIONAL ELECTION CAMPAIGN VOUCHERS.-Every individual (other than a nonresident alien) whose income tax liability for his taxable year preceding a congressional election year is $1 or more may elect to receive a congressional election campaign voucher which shall be redeemable as provided in section 3 of the Federal Elections Campaign Financing Act of 1967.

"(b) PRESIDENTIAL ELECTION CAMPAIGN VOUCHERS.-Every individual (other than a nonresident alien) whose income tax liability for his taxable year preceding a presidential election year is $1 or more ($2 or more, if the taxpayer also makes an election under subsection (a) for such taxable year) may elect to receive a presidential election campaign voucher which shall be redeemable as provided in section 3 of the Federal Elections Campaign Financing Act of 1967. "(c) DEFINITIONS.-For purposes of this section

"(1) CONGRESSIONAL ELECTION YEAR.-The term 'congressional election year' means a calendar year in which a general election is held in the various States for the election of Members of the Senate and the House of Representatives of the United States.

"(2) PRESIDENTIAL ELECTION YEAR.-The term 'presidential election year' means a calendar year in which a general election is held in the various States and the District of Columbia for the election of presidential and vice-presidential electors.

"(3) INCOME TAX LIABILITY.-The income tax liability of an individual for any taxable year is the amount of the tax imposed by chapter 1 on such individual for such taxable year (as shown on his return), reduced by the sum of the credits (as shown on his return) allowable under sections 32(2), 33, 35, 37, and 38.

"(4) TAXABLE YEARS TO WHICH APPLICABLE.-An individual's taxable year preceding a congressional election year or presidential election year is his last taxable year which ends before April 1 of such congressional election year or such presidential election year, as the case may be.

"(d) MANNER AND TIME OF ELECTIONS.-An election under subsection (a) or (b) may be made for any taxable year preceding a congressional election year or presidential election year, as the case may be, in such manner as the Secretary or his delegate may prescribe by regulations

"(1) at the time of filing the return of the tax imposed by chapter 1 for such taxable year, or

"(2) at any other time after the time of filing such return and before such date as the Secretary or his delegate may prescribe by regulations.

"(e) FURNISHING OF VOUCHERS.-The Secretary or his delegate shall issue and furnish

"(1) a congressional election campaign voucher to each individual who makes an election under subsection (a) for any taxable year, and

"(2) a presidential election campaign voucher to each individual who makes an election under subsection (b) for any taxable year.

Such vouchers shall be in such form as the Secretary or his delegate may prescribe and shall be issued and furnished after August 15 and before October 1 of the congressional election year or presidential election year, as the case may be." (b) The table of parts for subchapter A of chapter 61 of such Code is amended by striking out the item relating to part VIII and inserting in lieu thereof the following:

"Part VIII. Vouchers redeemable for Federal election campaign expenses."

(c) The amendments made by this section shall apply with respect to income tax liability for taxable years beginning after December 31, 1966.