We have found in Puerto Rico that unless we can provide adequate opportunities for the expression of dissident views and for the facilities to the challengers, we have two equally undesirable consequences.

One, disillusionment, cynicism, coping out. And the other, violence. Both of these alternatives we find inimical to basic processes of government by law and government meriting the respect and the support of the citizenry.

The public financing is, of course, not the only road to achieve a goal of this nature, but certainly is one of the important roads. And we have, I believe, tested in Puerto Rico to be so.

Senator PELL. Thank you very much, Congressman Benitez, for your statement and for bringing to us firsthand the results of your experiences in Puerto Rico, which the mainland may emulate. We are very glad to have had you here. Thank you very much.

Our next witness is Congressman Morris Udall. I must apologize to him. I didn't realize he was in the room earlier.

STATEMENT OF HON. MORRIS K. UDALL, A U.S. REPRESENTATIVE FROM THE STATE OF ARIZONA

Mr. UDALL. Thank you, Mr. Chairman. I have a prepared statement, and would like it inserted in the record and I'll summarize now and then respond to any questions you may have.

I first want to thank you and the Subcommittee for the good work you did recently in tightening up and improving the 1971 Campaign Reform Act. I regret that the House isn't moving more quickly, but believe we'll finish it up this year. I think the House owes the Senate and the country some response to the interesting and constructive changes that you sent over to us.

In the meantime, I think it's very important; in fact, vitally important, that you go ahead with these hearings on the question of the public financing of elections.

It is my judgment that in the backwash of Watergate, if we cannot make the move this year to some kind, public financing, we won't make it in this decade and probably not in the next.

Thus, I think it's crucial that you finish these hearings and then reach some judgment here in the Senate. Send us something to work on over in the House, and we'll go from there.

There are many of us in the House who want to seize this moment of opportunity and do the very best we can. I am here today to talk about a bill which is sponsored by nearly one-third of the membership of the House, representing perhaps 75 million Americans.

There have always been a lot of ideas around in the civics books that never make the transition to the political arena. For example, one of them is the electoral college; 99 percent of the people think we ought to abolish it, but you can't get 51 percent to agree on any one single plan to do it.

Public financing may be the same kind of an idea. It's not new. As you have heard repeatedly, it has been proposed since the time of Theodore Roosevelt. But every single public financing proposal has

in Virginia, Senator Buckley from New York, and ( Moakley of Boston, who was an independent last year incumbent, can attest; any number of these things that I on our political life and most of the public financing pro answer this question.

The second question is, are we going to finance every maries, anyone that wants to run for Congress, so that yo up with 50 to 100 candidates, all having a good time at pu in the primary, yet if we don't finance them, as the Senator out, sometimes we may ignore the real, credible candidates.

A third question most of the public financing proposals on is are we really going to finance-in a major way-hop dacies in one party districts? I know of congressional dis you have a strong incumbent or are one-party districts, wh had a member of the other party in Congress for 100 we going to give someone who can go to a convention and g party's nomination $50,000 or $100,000 to have a nice ego tise his law practice, his business, or whatever?

These kind of questions have halted every major publi proposal. What it really gets down to, and the real defect the public financing proposals, is having someone, either i gress or some board, or public official saying, "you are a candidate: you are a legitimate minor party candidate, and anoint you so that you qualify for these Federal subsidies." are anointed as a legitimate candidate, how much should w if you are a minor party or third party?

Are we going to give them all of the potential subsidy, a third? Someone has to come up with a formula. I have neve Mr. Chairman, that we are going to make the jump dire from a private system of financing to a totally public would seem to me that we are going to have to make it in steps. We are going to have to go first to some kind of a mix And so, Congressman Anderson of Illinois and myself, w 140 cosponsors in the House, have proposed a plan which I t for the first time these serious questions that have prevented of public financing from ever being enacted.

We would include all Federal elections, not just the Pres just the Senate, not just the House, but all of them. We w primaries, generals, runoff's. We would provide a funding both individual candidate and the national party. We w fair allowances for minor party and third-party candidates. this we would propose to do at a cost of little more than $ for every registered voter in America.

We think, as I say, that our proposal answers every sin objection and most of the minor objections that have been the different proposals before this subcommittee.

As I understand it, no one has introduced this particular in the Senate, and so it is not officially before you. But w could still provide the basis for getting action this year.

Let me, with all due respect, just take a moment before I

to point out coma dofanta in the ath

but my point is that none of them meet all these major objections that have been made in the past.

For example, Senator Hart's proposal covers only the congressional elections. It excludes the presidential races and that race was the real culprit in the Watergate scandal. Further, it would exclude any assistance to the national party committee. The Hart proposal is costly, almost twice the cost of the Anderson-Udall proposal. Finally, the entitlement provisions in Senator Hart's bill don't really test the candidate's serious intent. You could have a candidate with a major party nomination, who no one except the candidate and his mother believed had a chance, and yet he would receive the same kind of full financing that almost any other candidacy would receive.

I don't think minor parties get a fair shake in Senator Hart's proposal, because you have to have a formula that ties them to the base of past support in some past election. Governor Wallace in 1968 had no real base to point to, and yet he was a serious Presidential candidate who had a serious impact on the Presidential contest.

The Kennedy-Scott proposal severely handicaps the important role of minor and third political parties. It doesn't cover primary elections, and, as has been pointed out, this is the real contest in many cases. The Mondale-Schweiker proposal leans a little too much to wealthier contributors by allowing matching of the first $100 of a contribution up to $3,000. We would exclude gifts of this size in our proposal. Third parties under this proposal are essentially left out in the cold. It also is limited to the Presidential races and doesn't include the senatorial and congressional races.

Now let me tell you what our proposal does: We begin with a mixture of public and private financing. We then let each candidate prove for himself, by his own bootstraps, as it were, how serious a candidate he is. If he is a major party candidate and can't get sufficient small contributions, he obviously isn't a serious candidate. If he is Senator Byrd in Virginia or Senator Buckley in New York or my friend Congressman Moakley in Boston and can raise sufficient small contributions than either of the major party candidates, he obviously is a serious candidate and ought to have more public support than would be indicated under some abstruse rigid mechanical formula for minor or third party.

Further, we say, is that for every $50 you can get from a small contributor, the Federal Government will match that $50; and the limit will be up to 10 cents per eligible voter.

In a congressional race, for example, if I can raise $25,000 through contributions not to exceed $50, then the Government will match that $25,000 and I will have a $50,000 campaign chest and my opponent, if he is serious, will be able to have the same kind of public financing.

Let me reiterate: This isn't the final answer. It's a first step. It doesn't force anyone to use it. But it would provide us the basis, Mr. Chairman, to move in one step from a totally private system to a mixed public-private system based on small donors, and after we go around the track a few times with this system, if the country then wanted to move to total public financing, we would be in a position. through this experience to do so.

So I urge the subcommittee-when the time comes to make the

we think is a new and innovative proposal which answers major objections and would lead us in the direction I t want to go.

Senator PELL. Is your bill, Congressman Udall, a cou any one that has been introduced in the Senate or is it bill not yet introduced into the Senate?

Mr. UDALL. My understanding is that it is not repre in the deliberations before your committee. It is not before I would hope some Senator would take a look at it and find in it.

Senator PELL. Do you have a number?

Mr. UDALL. Yes; H.R. 7612.

Senator PELL. Well, we will have that inserted in th of the hearings so that we will have all the bills and all th in one volume.

[The text of H.R. 7612 appears as exhibit 2E in the a p. 569 of these hearings.]

As we move ahead, we can try to weigh them and try a table so that the layman can have some sort of idea as common denominators are among the different bills.

Mr. UDALL. That would be very helpful.

Senator PELL. You are very kind to come and at s venience. And again I apologize for the delay.

Mr. UDALL. No difficulty, I understand the problems of Senator PELL. My son is one of your constituents, so I ar to see you here.

Mr. UDALL. I am delighted. Thank you.

[The written statement of Representative Udall follo

STATEMENT OF HON. MORRIS K. UDALL, A U.S. REPRESENTATIVE STATE OF ARIZONA

Mr. Chairman: Elections are the time when the governed give t to those who govern. If the conduct of elections is in question-and then our entire system is on shaky grounds. Of all the proposed elec that have been discussed in the wake of the Watergate tragedy, most promising-yet the most controversial-is public financing costs.

A vast majority of the public and Members of Congress favor public financing. In fact, a Gallup poll conducted in June showe of the American public favors some form of public financing of recent months, it has won the support of newspapers and editorial ranging from the New York Times to James J. Kilpatrick and officials like Vice President Agnew.

But public financing is like the electoral college. Everyone want it, but the rub comes when you try to get an agreement on the deta system.

Public financing is not a new proposal. But ever since Presiden Roosevelt first suggested public finance back in 1907, three basic que been asked and, until now, no one has been able to answer them. 1. How would third or minor parties be handled?

2. Would it cost exhorbitant sums to finance primaries and mul races the real struggle in many cases?

3. Should hopeless general election candidates in "one party" financed and if not, who determines which ones are serious?

These questions, as I see it, leave us with three alternatives:

1. Forget the idea of public finance and stock with our current, illsystem of total private campaign financing, tightening it up as b

2. Make a drastic immediate shift to total public finance and hope the aforementioned problems will solve themselves.

3. Institute a system that blends public and private financing, maintaining the postive features of both while clearing the hurdles they each present. Such a system, I feel, would answer the urgent need for campaign finance reform. If at a later date, we should decide to make the shift to total public finance, a mixed system would serve as a valuable transition and testing ground for the concept of public finance.

A central question in any campaign reform measure is the question of incumbency. Many people feel that the more limitations we place on spending and contributions, the more the so-called "inherent advantage" of an incumbent will be reinforced. Many of our colleagues, on the other hand, we feel that by bending over backwards to make life easy for their election opponents, we somehow jeopardize the value continuity of government that some measure of incumbency affords us.

I fail to see the logic used to advance such arguments against public finance. Concise conclusions cannot be drawn linking wealth with victory in every contest. To eliminate these baseless arguments, public finance, as we have proposed it, will help balance campaign funds between contenders for office. It will tie those financial resources to the candidate's true public support shown by the number of contributors rather than the contributions from a wealthy few.

Congressman Anderson and I have introduced a measure in the House which follows the idea of a mixed system of public and private financing.

The Anderson-Udall Clean Elections Act would establish a system of Federal grants matched to contributions of $50 or less with increased tax credits to stimulate such contributions. Candidates (including "third party" candidates) for House, Senate, Presidential and Vice Presidential nominations, and national party committees would be eligibile to participate in our system.

But someone could not just announce, "Boys, I'm a candidate, please send federal money," and expect to receive it. He or she would have to prove he is seriously in the race by raising a set amount in donations of $50 or less. We recommend a $1,000 minimum for House races, $5.000 for Senate and $15,000 for President or national party committees. To receive additional federal grants the candidate would have to continue to elicit more small donations, up to a ceiling of 10 cents times the number of eligible voters for candidates and $15.000,000 for national party committees. Only donations of $50 or less would be matched. If a donor gives more than $50 over a period of one year, none of the additional contributions could be matched.

Our proposed system would cover all federal elections candidates; would cover primary, general and runoff elections; would provide a funding base for both the individual candidate and the national parties, would make considerable allowance for third and minor party candidates and would do so at a cost of little more than $1 for every registered voter in America.

Such a system is feasible. Consider that in 1964 Senator Barry Goldwater set new fundraising records by appealing to small donors and just last year, Senator George McGovern raised over 80% of his campaign costs in donations of $30 or less. A check of party fundraising last June showed that approximately 75% of all donations to the Democratic party had come in sums of $100 or less while the Republicans reported that almost 90% of the funds they received are from donations of $100 or less.

Our matching grant system would be complemented by other elements of our bill. One proposal contained in our bill, the Voter's Time system, would make a substantial dent in campaign costs by providing free prime-time television to candidates. General election candidates for President, Vice President, Senate and House would be given a set number of 15 or 30 minute blocks provided they use the time for substantive live broadcasts.

Our measure would also set strict individual contribution limits of $1,000 for House or Senate races and $2,500 for presidential elections and national party committees. National parties would be restored to a position of responsibility through a provision in our bill that would exempt them from limitations on contributions to candidates. Direct mail would be added to the items now cov