up amounts to less than one one-hundredth of 1 percent of Federal expenditures. Yet to a large extent this relatively small amount of money puts this small percentage of people in position to unduly influence or even to control the outcome of certain vital public issues and perhaps to determine the outcome of Government decisions. What would be the answer? We ought to simply provide adequate funds for both major parties to make their case, thereby drastically reducing the need of candidates to seek private contributions, and leave those candidates in position to decline any contributions about which they had the least doubt. Now, for those who prefer the status quo to so simple an answer, diversionary tactics are often the best defense. One good diversionary tactic is to insist that there must be guidelines spelling out in detail precisely what can be done and cannot be done. The second is to say that before anything is done, we must pass other laws in other areas where we have never been able to find adequate answers in 180 years. Then another proposal would be to raise 50,000 problems in connection with the so-called guidelines and minutia once it has been agreed upon that you are going to try to spell all that out. Of course, if you don't want to do all that, if you want to try to find an answer, about the best way, as I proposed last year, is to have good people in both parties study these problems and come up with the answers to provide these guidelines in detail, to answer 50,000 questions that could be asked. Just let your advisory group look at the question and try to provide a fair answer for both sides and let both sides conduct themselves by the same guidelines. Another answer might be to try to split the difference. Say with regard to the major questions we would provide a legislative answer, and on the minuscule problems that the board, the bipartisan board, and the Comptroller General resolve those after consulting and deciding what you are going to do. For instance, can the candidate for Congress sit on the platform with the President or is he to be barred from sitting there. You worry about that. I would just as soon not be bothered with it. But if you want it, it is all right with me, I will take the answer either way. And for these minor, piddling, inconsequential problems, such as, well, you can say on the sign-board for the Republican candidate, on the bottom, "Vote the whole ticket." I don't care how you do it. If they say it, I will urge the Democrats to say the same thing on our signboard, "Vote for the whole ticket." It is all right either way. Just tell me what the decision is and we will abide by it. I think you ought to answer these minuscule problems which can be dreamed up by the thousands overnight. If somebody raises a question then you go ahead and provide the answer and we will both abide by it. Another way that we could see that nothing happens to clean ud what is admittedly a bad situation is to insist that before anything is done we will make perfect a 42-year-old law that never has worked and probably never will work. "Oh, my goodness, that is the answer, make that 1925 Corrupt Practices Act work and that will solve the whole problem." It won't solve anything. It won't answer the first question which is how do you find the money so both sides can make an adequate presentation of their case to the public without having to call upon large contributors for large amounts of money and incur the obligations that are implicit in that. Now, it has been said here that a law, and I am sure that it is in all sincerity, that if we had a law to forbid you from promising an ambassadorship or a job in order to obtain a financial contribution or in order to even obtain a vote-what kind of problem does that provide? Well, if one wants to get around it he doesn't promise a job, he says, "you understand, old friend, I am not promising this job as Ambassador but you will be considered" and the time comes and he gets the appointment. I am not pointing the finger of scorn at the Republican Party, it has happened on both sides of the aisle. What is the answer? Just fix it up so you just don't need his money, and if the donor is interested in being considered for Ambassador, if you really think he has got his heart set on it, and he would be severely disappointed, just don't take his money. The same thing is true about a great number of other things that occur in Government, where the people are too sophisticated to come and ask that you promise to maintain their monopoly. They just look at your record, that is how you voted on down through the years so they don't need to ask any promise of that Senator. You have a magnificent record upon which they can rely on that basis if they are interested in preserving or protecting the special advantage they have, they can take him on faith, they don't need any commitment as to how he will vote in the future. That is how he voted in the past, didn't he, and he has a record of consistency. I am not trying to solve the senatorial question, but I am saying suppose that Senator is running for President, and if they have his overall record they have something to look to and rely on. Frankly there is nothing to keep a man in his party platform from saying he is going to do and making speeches on what he expects to perform when elected, and some of that language can be so sophisticated the rank and file of the people won't know what you are talking about. For example, you can go on television and say, "I am just convinced that the Federal Reserve Board must be independent and the stability of the dollar must be protected, we must not lose our gold," and any banker in America would interpret that to mean you are going to have high interest rates. So these things are matters that are very important. The stakes involved amount to many billions of dollars. In the Government sector they amount to billions and in the private sector they sometimes amount to tens of billions of dollars. What I am advocating is that a person should be able to do whatever he wants to do about it and people ought to be able to vote for a candidate relying upon his campaign commitments and his record, what he stands for. But neither side should have any advantage one way or the other. I have been very fortunate, may I say, that generally speaking, Mr. Staats, I think I have been better financed than my Republican opponent down through the years because I fear that most people didn't think he was going to win. I am not in position to complain about how these elections are financed today. But I do know that we we ought to lift the Presidency above the control of the money of 1 percent of the people. I don't mean the control, but above the influence and above the necessity of obtaining a substantial amount of money from wealthy people. I know labor contributes. My impression is that they contribute about 1 percent of the overall costs. I don't blame them for making it sound like more or anybody else from making it sound like more, but my impression is that the contributions of labor is relatively small. If he wanted to present his case to the American people in the race for President, that Office should be elevated above the necessity of accepting contributions from any particular group. Mr. STAATS. I would think so. I just don't know. Senator WILLIAMS. Just one question. I understand both the chairman and you would now recommend that the bill be amended, if necessary, to require labor to report how much it spends on the campaigns. Mr. STAATS. I didn't understand that Senator WILLIAMS. Would you recommend such a proposal or endorse it? Mr. STAATS. Under the other bill any contributions Senator WILLIAMS. You think it should be yes. Mr. STAATS. Any contribution in excess of $100 would have to be reported. Senator WILLIAMS. One final question: The suggestion has been made or the inference that we should disregard the need of amending the Corrupt Practices Act because for 42 years, or since 1925, we haven't done anything. I don't think that is an excuse. But is it not true that President Johnson recommends to the Congress last year, when he recommended $100 deductions, and this year when he recommended the appropriations, both embraced a recommendation in the same message for a complete revision of the Corrupt Practices Act to require full and complete reporting? Mr. STAATS. Yes, I think that is correct. The CHAIRMAN. Let me just make it clear so there will be no misunderstanding of my position here, that I am willing to support in, general terms, although I reserve the right to differ on specific points the President's recommendation in the field of amendments to the corrupt practices law. It will do some good. Generally speaking I think those recommendations sound pretty good. But I am not willing to settle for zero as an answer. If loading all that stuff on this bill means that you get no bill at all, then I am for providing a different and better answer. I suggest we do just as much good as we can for now, and then do more later on. Sometimes you make a mistake doing too much good all at one time. Maybe if you can do some now and a little more later on you might succeed where if you tried to get everything done at one time you fail. While you could sell part of the package you couldn't sell it all. May I say, Mr. Staats, part of the problem I had with you is that during the time you were director of the Budget I couldn't do as much good as I wanted with my people because you were concerned with the cost of it on the Federal budget. But you did the best you could. You pinched some pennies on us and you provided some relief. And I propose to take the same approach. We will do the gest we can under the circumstances and I hope the country will still be around a year or two later when we try to improve on it again. Thank you very much for your statement here. Mr. STAATS. Thank you, Mr. Chairman. (Whereupon, at 12:55 p.m., the committee recessed to reconvene at 10 a.m., Tuesday, June 6, 1967.) POLITICAL CAMPAIGN FINANCING PROPOSALS TUESDAY, JUNE 6, 1967 U.S. SENATE, COMMITTEE ON FINANCE, Washington, D.C. The committee met, pursuant to notice, at 10 a.m., in room 2221 New Senate Office Building, Senator Russell B. Long (chairman) presiding. Present: Senators Long, Smathers, Anderson, Gore, McCarthy, Williams, Carlson, Bennett, and Dirksen. The CHAIRMAN. The hearing will come to order. Today we continue receiving testimony on various measures to improve the financing of political campaigns. Most of our witnesses today support a tax credit or a tax deduction approach to this matter. Our first witness this morning is the Honorable Joseph S. Clark of Pennsylvania. Senator Clark is the author of S. 1547, one of the political campaign financing bills presently before the committee. It would allow an income tax credit of one-half of the amount of political contributions up to $40. Under his formula the maximum tax credit would be $20. Senator Clark, we are pleased to have you with us this morning and we would be very happy to hear your views on the subject. STATEMENT OF HON. JOSEPH S. CLARK, U.S. SENATOR FROM PENNSYLVANIA Senator CLARK. Thank you very much, Mr. Chairman and members of the committee. I appreciate this opportunity to appear before you. Actually, I appear in support not of one bill but of three; S. 1546, a bill known as the Election Reform Act of 1967, which was referred to the Committee on Rules and Administration when I filed it on April 14; S. 1547, a bill to amend the Internal Revenue Code to allow an income tax credit for certain political contributions made by individuals, and to repeal the Presidential Election Campaign Fund Act of 1966, which was referred to this committee; and S. 1548, a bill to amend the Communications Act of 1934 to provide for the furnishing to candidates for public office of free radio and television broadcast time on a fair and equitable basis, which was referred on the same date, April 14, to the Committee on Commerce. These three bills, in my opinion, are or should be considered as a package, and I would suggest that they be so considered by the committee. Of course, the rather peculiar parliamentary procedure by which the whole general subject of campaign financing, election reform, and |