his books is this one, "Financing the 1964 Election," which we have consulted a number of times. Mr. Alexander was the Executive Director of the Commission on Campaign Costs which reported to President Kennedy in 1962. He also served as consultant to the Neustadt Study Group named by President Johnson last year to report back to him on the subject of campaign financing. In addition, Mr. Alexander has been a consultant to congressional committees on the subject of election reform. In order that this hearing would reflect all viewpoints regarding the important matter before us, a number of leading political scientists were invited to participate in our discussion. Professor Alexander has graciously consented to share his expertise with the committee. I am sure that his remarks this morning will be of immense value.

Professor Alexander, you are recognized.

STATEMENT OF HERBERT E. ALEXANDER, DIRECTOR, CITIZENS RESEARCH FOUNDATION, PRINCETON, N.J.

Mr. ALEXANDER. Thank you, Mr. Chairman. I want to state at the outset that my views are my own. They do not represent those of the Citizens Research Foundation or of the Neustadt Study Group. I have no prepared statement, but I am prepared to speak from notes, with your permission.

Senator METCALF. Go right ahead.

Mr. ALEXANDER. I appreciate the opportunity to be here. I would like to play for a moment the devil's advocate and help to get the pros and cons of the various alternatives before the committee in order to better understand the implications of each proposal that has been made.

For example, tax incentives, I think, do violence to the tax system and will not guarantee any candidate or committee the necessary money. On the other hand, subsidies clearly affect balances of power within the parties, affect party relationships, and perhaps would adversely affect efforts to get more citizens in the habit of contributing. So I think it may be necessary for this committee or for the Congress to choose as between various values and consequences. That is why it is necessary to sit back to look at the various alternatives, the advantages and disadvantages of each, in some perspective and to ask what is it we really seek to accomplish? What are the practical and constitutional considerations of the various alternatives?

We are building on a system of financing what is basically a twoparty system, rooted in a strong spirit of voluntarism. Voluntary effort has been the great sustaining force in our political parties. You men know that better than any of us, because you have participated in campaigns, you are, in a sense, yourself volunteers as candidates.

Voluntarism also provides campaign workers and money to sustain the political process.

Now, I think it is terribly important to recognize that a democracy requires and should encourage widespread participation by citizens in the political process. There is both value and inherent danger, however, in a system of private contributions. Unfortunately, even in our affluent society, we have not yet had sufficiently wide financial participation to sustain all parties and candidates. So there has been

with some notable exceptions, excessive, relatively great dependence and reliance upon relatively larger contributions.

But we have been improving and we are a long way from the time at the turn of the century when a handful of robber barons or millionaires may have helped to support the great national parties.

For example, public opinion polls in 1964 indicate there were as many as 12 million contributors, at all levels, to political activities in that year. Unfortunately, we do not know how many of these contributed to the Presidential as opposed to congressional, State or local offices. But nevertheless, 12 million does represent 17 percent of the electorate in that year and it represents a dramatic rise from the 3 million or so contributors that were found to have made gifts in the year 1952. So we have come a long way in the direction of broadening the base.

At the same time, I think we have to recognize the political costs are high and are escalating, putting undue pressures on the political system. So it is incumbent to recognize the need for some form of Government assistance to help provide alternative sources to the parties and candidates. Government assistance, I think, should be in a form that is fairly reliable, that is not subject to political whim or maneuvering in a given election year.

Now, with respect to subsidies, the most important question, I think, is the question of to whom to give the money. Whoever gets the money gets certain political leverage. If the money is given to the national committee, this could significantly change power balances within the parties. I do not say it is necessarily wrong to give it to the national committee if you recognize that you are thereby strengthening the national committee vis-a-vis State and local committees or even vis-a-vis senatorial and congressional campaign committees. Certainly, if you favor strong national parties, there is no problem whatsoever in giving money to the national committee for a presidential campaign. The important thing, I think, for the Congress to determine is the extent, the direction, the dimension of the subsidy that you are willing to put into the hands of the national committee if that is the route that the Congress decides to go. Clearly, money gives the national chairman and the national committee leverage. The problem is how to direct the money without favoritism or without factual advantage or without interfering with campaign strategy. This is a very difficult, complex question.

For example, if the national committee is going to make some expenditures in the States, in some States, there is not much party organization to work with, with the result that they would probably bypass the State committees and work with volunteers. Now, this may affect the efforts to build a stronger State party organization. In some States, the national committee might not want to work with the State committee at all. For example, to be frank about it, the Democratic National Committee might not want to help the Alabama State Democratic Committee when the money may be controlled by a former Governor of that State.

Even with respect to the 140 percent rule which was recommended. by the President with respect to expenditures by the national committees within the various States, I think even there, there is room for bargaining. The national committee can still say we will spend only up to 70 percent unless you do this or that, whereas we will

increase the amount to 100 percent or to 140 percent if you do this or that. Now, in certain circumstances, that could affect both the delegation of that State at the National convention and it could also have effects upon the elected representatives from that State in the President's dealing with members of his party, for example, here in the Congress.

Also, it raises a question, if 140 percent were spent in New York and the money were utilized up to that extent over radio and television in New York, we have to remember that the New York channels serve also New Jersey. New Jersey has no commercial TV stations. The question is whether you could go beyond the 140 percent in order to reach New Jersey audiences under the New Jersey portion of the formula. Some of these things could be worked out, I am sure, nevertheless, I want to raise them.

There is also a point under the 140 percent formula which the administration proposed, which is that if very many States got as much as 140 percent, some States would be starved entirely. That is, they would not receive any funds, or expenditures would not be made by the national committee in those States.

Now, the administration proposals, the bill introduced by Senator Long, would restrict the subsidy to essentially media and travel expenses, which does raise several other questions. It is, in effect, a limitation upon the amount that can be spent on media and travel to say that only public funds provided by the subsidy can be used for those purposes. Now, in some cases, this could conceivably begin to interfere with campaign strategy. I refer to the closeness of the public opinion pools the week before the 1960 presidential election, when some extra efforts might have wanted to have been made on behalf of one or the other or both of the candidates.

I would like to suggest the possibility of, say, a scurrilous charge being made over the weekend before the election and the opponent needs to buy extra time to go on television, extra hours the day before the election in order to answer those charges. I think you conceivably could run into problems of this kind with respect to these kinds of limitations.

In his testimony on the first day of hearings here, Under Secretary of the Treasury Barr indicated, according to figures that were provided to me by the national campaign of the Republicans in 1964, that about $8.3 million had been spent on media and travel during the 1964 presidential campaign. But actually, of course, much more is spent at the State and local levels on media and travel connected with presidential campaigns. Unfortunately, we do not know how much, but we do have some representative figures if you want them. The administration bill, the bill proposed by Senator Long, also raises questions of how to allocate expenditures in case of joint appearances; that is, in most of the travels of presidential candidates, when in a State, he is on the platform with the senatorial, congressional, gubernatorial and other candidates of the State. I think it is really a policy determination that should be made by the Congress as to how far the Comptroller General could go in paying for and certifying expenditures in cases of that nature.

Now, the administration bill also raises questions of whether salaries of certain campaign employees engaged in activities acceptable as qualified expenses could be included. That is, during a presi

dential campaign, certain employees of the national campaign may be working exclusively in making travel arrangements, or in preparing media copy. So that, I think again, if the Congress decides to enact a subsidy, it should make clearer than in the present bill, precisely the extent if any to which the national committee can certify expenditures for employees involved in those qualified activities.

I think also that the administration proposal raises some questions with respect to the emergence of independent groups. I refer also to the Liberal Party in New York State which normally, at least in recent presidential elections, has endorsed the Democratic candidate. Now, the Liberal Party in New York would not qualify as a major party under the subsidy; yet if it raised and spent money on behalf of the Democratic ticket, this would be an example of other than public funds being used for these precise media and travel purposes. One can raise the question as to whether a subsidy in the form that has been suggested might not actually encourage the proliferation of such committees at the State and local level on behalf of presidential candidates, independent of the party organization.

Again with respect to the administration proposal, I think it is desirable to tie the subsidy to a formula based on the previous vote; that is, the vote 4 years previous-and divide it evenly between the major parties, as was provided in the original Long Act. I think this is terribly important, because I can envisage a time when the Congress might be dominated by individuals who are concerned with balancing the budget and might not want to appropriate very much money. I can envisage a time when the Congress may be dominated by an incumbent President who is running for reelection, who has the advantages of incumbency, who looks like a sure thing to win, and his party in the Congress might not want to appropriate more than a token amount for the opposition to field its candidate, to get its candidate and position known through the media and through travel. So I think it is terribly important that if the Congress enacts a subsidy of the type proposed by the administration, that it be tied to a definite formula and divided evenly as between the two major parties, with other provisions for the minor parties.

Now, with respect to tax incentives, I would like to say that four States now do have tax deductions for political contributions. The advantage of a tax incentive is that citizens' patterns of contributing determine who will receive the benefits.

There are no inflexible formulas, as are necessary under a subsidy provision. Tax incentives also have the advantage of being able to reach all levels of party and candidacy, including levels where the problem is perhaps greater than it is at the Presidential level. Moreover, tax incentives can easily be extended to prenomination, as well as general election campaigns. The general evidence is that the impact of money on the political process is greatest at the prenomination phase and is less significant in the general election. I do not think a single Presidential election in the 20th century would have been changed had either party had more money or been able to spend more in the campaign. However, tax incentives are no panacea. They require the parties to get out and raise the money. They do give solicitors an additional sales tool in that they can say, if you give $10 perhaps half of it will be eligible for a tax credit.

On the other hand, tax incentives do not give any assurance that any given candidate or committee will receive sufficient dollars to put on the kind of campaign considered necessary or desirable. Tax incentives have one other advantage or disadvantage, depending on how you look at it. That is that there are fewer side effects to tax incentives than subsidies.

That is, they less affect party relationships and balances of power, because the citizens are contributing perhaps as much as in the past to the candidate of and committee of their choice. They are making the choice. So there are fewer side effects to tax incentives than there are to subsidies.

With respect to tax incentives, I think a tax credit is preferable to a deduction. It reaches more people more effectively, is fairer, and I think is closer to the one-man, one-vote principle.

With respect to minor parties, I certainly agree that the percentage formula proposed by the administration is preferable to the determination of an arbitrary number of votes for a qualification to receive subsidy money. That way, the Congress does not need to change numbers every 4 or 8 years. The minor party problem, in a sense, would be eased by tax incentives in that you can simply state that minor parties or candidates are eligible if they are on the ballot. Getting on the ballot is essentially within the control of the States, not the Federal Government.

With respect to Senator Metcalf's voucher plan, I like to call it political scrip or political green stamps. I think it has some potential in terms of a direct subsidy. It may be preferable to some other formulas for the reason that there is still citizen determination of where the money is going.

But I think it has to be understood as being basically a direct subsidy and there are mechanical problems with respect to how to distribute the money or the scrip, whether to give it only to taxpayers and if to taxpayers, do you give it to both the husband and wife on a joint return? And if not only to taxpayers, how else do you distribute it? And also, when do you distribute it?

If you distribute it early enough in the year, conceivably it could be extended and useful in prenomination campaigns as well as in general elections. Certainly it is versatile in the sense that it could be utilized easily for presidential, senatorial, or congressional campaigns. You may not want to go beyond that at this point. But clearly, it offers some advantages in that voluntarism is encouraged in the sense that parties and candidates might have to go out and collect these.

One of the sleeper suggestions in the report of the President's Commission on Campaign Costs was for a matching incentive plan. This is a form of subsidy under which the Federal Government would match, up to $10, amounts contributed by different individuals. In theory, this is a good kind of subsidy, because it does not sacrifice, but actually encourages voluntarism and spontaneity in the political system. It is probably not politically viable at the present time, because one party so outnumbers the other here at the national level with respect to numbers of contributors that one party would unduly benefit and the other would not unless it was able to organize a tremendous solicitation program within a short period of time.

I will close with only one more point. I have taken more of your time than I really intended to. Whichever way the Congress goes, this