I recognize the value of the present incremental process, which permits candidates to concentrate on two small States, spending lesser amounts of money, with good showings triggering new fundraising, enabling a candidate to build a campaign on a step-by-step basis. Yet the unrepresentativeness of the present sequence is too great a price to pay, and so I would only say that I served as a consultant to a program for reform that was put forward by the Center for Strategic and International Studies back in 1986, and that was chaired by a Democrat and a Republican, Bob Strauss and Mel Laird. It came up with a number of suggestions that might be useful to the committee.

it.

If you have room to put this into the record, I would appreciate

The CHAIRMAN. Yes, we will make that a part of the record. [Material retained in Committee's permanent file]

Mr. HERBERT ALEXANDER. Now I will move to the costs of campaigning. It cost $4.2 billion to fund the campaigns in the electoral cycle 1995-96. And I have specifications of how much was spent in the Presidential, the congressional, and other elements, including the State and local, the maintenance of the party system, including ballot issues, which are now appearing on the ballot in as many as 24 States.

Now, $4.2 billion may sound like a lot, but, actually, the amounts that were spent by Procter & Gamble and General Motors-the two largest advertisers in 1996-exceeded the amounts that were spent on all politics at all levels, Federal, State, and local. And so I don't think the problem is that we spend too much money. What we need is more competitive campaigns by candidates who are going to bring to bear solutions to the problems that face the country.

Politics has become highly professionalized, including pollsters, media specialists, computer specialists, fundraising consultants, and a host of other experts whose services are expensive.

Also, with the advent of strict laws, such as the Federal Election Campaign Act, candidates and parties need to hire election lawyers and political accountants. And so I think that the costs are going to continue to increase.

One suggestion I have is to produce an Index of Campaign Costs. Current reliance on the Consumer Price Index gives biased estimates because the CPI is not designed to cover such expensive campaign items as broadcast costs, fund-raising expenses, or getout-the-vote costs. At least we should properly diagnose the problem and know its true dimensions.

With respect to contribution limits, I will only say that the value of the dollar has eroded to such a point that a $1,000 contribution is only worth about $300 today. And so, accordingly, I endorse the Hagel-Kerrey-Landrieu bill, S. 1816, which would increase that amount to $3,000 for individual contributions and other elements of contributors proportionally, but would also set a limit on soft money, which is my next topic.

I think that soft money has arisen as an important value in American politics because the contribution limits and the expenditure limits in Presidential campaigns have been too low. And I think that if it is desirable to stop the flow of soft money, that the

parties ought to be weaned from it, not go cold turkey by saying there should be no more soft money in one fell swoop.

I do think that we should try to convert soft money to hard money to a greater extent, and part of that would come about if we raised the contribution limits for money to candidates, but also money to political parties. And in that respect, I would go on to talk about two elements in the bipartisan freshman bill the Congress before last, which was in the House, and which I think has two elements that are terribly important. One is to retain the annual limit on aggregate contributions by an individual at $25,000, leave it there but put on a separate track of $25,000 as well money that can be given to the parties. Over a 4-year period, that is $100,000, and what I would do is leave the present $25,000 just for candidates and PACS and have a separate track for parties. I think that would help fund the parties, and they might not need to rely, to the extent they do now, on soft money.

Another factor that I think is terribly important would be to repeal the party-coordinated spending limits. As you know, the parties can spend such money in Presidential and also in senatorial and congressional campaigns. I think if those were repealed, we wouldn't have as much resort to soft money, we wouldn't have as much resort to the problems that now face candidates, particularly for the Senate and House, where these candidates face wealthy candidates who spend unlimited amounts of money out of their own pockets, barrages of ads directed at a campaign, often negative ads, say, the beginning of October. If the party could come in and help meet the responses to that barrage of soft money advertising or negative advertising or independent expenditures, I think those would be two features that would be very helpful.

The CHAIRMAN. Professor, if you could sort of wrap it up? Mr. HERBERT ALEXANDER. Okay. I am on my conclusion. Campaign reform is much in the news lately. The Congress should be wary of proposals that seek to take more and more private money out of the political arena by retaining low contribution limits, take out political parties by removing soft money and depriving them of a meaningful and needed role, and take politics out of public policy development, leaving mainly self-proclaimed citizens' lobbies and newspaper editorial writers to seek to influence elected officials. But these should not be the goals of campaign reform in a democratic society. What is left out of the equation is concern about there being sufficient money for candidates to tell their stories, to give their records and qualifications, and for parties to spell out their themes. Too few point out that elections are improved by political actors able to wage competitive, even if expensive, campaigns, not by stifling political dialogue.

[The prepared statement of Mr. Herbert Alexander follows:]

PREPARED STATEMENT OF HERBERT E. ALEXANDER, PROFESSOR EMERITUS OF POLITICAL SCIENCE, UNIVERSITY OF SOUTHERN CALIFORNIA, AND DIRECTOR EMERITUS, CITIZENS RESEARCH FOUNDATION, SILVER SPRING, MD

I am happy to respond to the invitation of Senator McConnell dated March 16, 2000, to testify.

THE PRESIDENTIAL SELECTION PROCESS

The criticisms directed at the presidential selection process may be summed up in the complaints that the process is too long, too expensive, and too exhausting for candidates and voters alike. I do not agree. However, improvements can and should be made.

The process is not necessarily too long. Looked at in perspective, a presidential election is the greatest educational event in the history of the country every four years. Agendas are set for the next term and various candidates get exposure, seeking nomination by achieving front-runner status, seeking to break out of the pack of second runners, seeking to win election in November. The nomination phase is essentially a screening process, giving candidates opportunity to audition, to show their stuff. While some candidates announce twelve to twenty-four months earlier, most are eliminated as serious candidates after the Iowa caucuses and the New Hampshire primary.

Critics often maintain that the presidential selection process as presently constituted rewards those proficient in the skills of getting nominated or elected rather than those adept at the art of governing. I believe the process should be structured to emphasize the qualities needed to formulate and get enacted public policies that deal effectively with national problems. Ironically, this requires qualities many voters do not like. It requires a solid grounding in party politics, which many of our citizens despise. But to be president does require political leaders with a thorough knowledge of the workings of the political system, and an ability to establish alliances and build coalitions with other political leaders and with supportive groups. I strongly believe both in strengthening the political parties and in party autonomy. Any attempt by the Congress to impose a standardized nominating procedure on the individual states, by requiring national, regional or time-zone primaries, would represent a federalization of an area that traditionally has belonged to the party committees and the state legislatures. Supreme Court decisions have made clear that the national parties can be masters of their delegate selection and nominating procedures. Accordingly, I oppose S.1789 because it would federalize the presidential prenomination process. However, the major parties should be assertive in setting their own goals and standards, and in rationalizing the present system into a more meaningful, coherent way to choose a president.

I think the national parties should mandate only essential standards, such as the setting of initial and closing dates in a spaced primary plan; action plans to elect more women and minority delegates; and the requirement that only registered party voters be permitted to vote for delegates in state primaries; and then the process should be deregulated to permit states to decide dates (within a designated period of time), thresholds, and delegate allocations. Thus the Congress should not impose standards, and the national party should impose only essential standards, with the state parties playing key roles. My sense is that there should be great flexibility to permit state parties to do within limits what suits their purposes, to do whatever local party building they perceive will help to win in the November election.

There is no single best way. One has to weigh the various tradeoffs according to one's values. In subscribing to shortening the window by limiting the inclusive time for primaries and caucuses, I suggest the period between the first Tuesday in March and the first Tuesday in June. States would have freedom of choice, selecting any dates within the window, and deciding whether to hold a primary, caucus, or state convention. Perhaps some rotation system could be used, such as is now being proposed by the National Association of Secretaries of State. This system would eliminate the undue influence of Iowa and New Hampshire, two states that are unrepresentative, without significant big cities, urban areas or minority populations. With a three-month interval, the initial Tuesday would offer more diversity, including some small, medium, and large size states, and would test candidates in more diverse states, giving voters or caucus or state convention participants more choices. It will also cost more because of the front-loading that would occur.

I recognize the value of the present incremental process, which permits candidates to concentrate on two small states, spending lesser amounts of money, with good showings triggering new fund raising, enabling a candidate to build a campaign on a step-by-step basis. Yet the unrepresentativeness of the present sequence is too great a price to pay. The psychological effect of winning in two small states, or of the media declaring winners or surprise second-runners, is so great that all attention is focused on these states to the detriment of wider choices that could be made in six or eight or ten states on the initial Super Tuesday. No single candidate would win in all the states, so a healthy competition would likely result.

Restructuring the system into a three-month period would raise the costs for initial activities, but this could be rectified by increasing the amount of the tax checkoff to $5 and introducing a different kind of matching program.

Though there is no consensus about what, if any, changes should be made in the presidential selection process, there is substantial agreement that the process should make clear that presidential prenomination and general election campaigns are not ends in themselves but means to the goal of electing an effective government. The process should encourage the candidates to articulate the direction in which they think the nation should be going to solve its problems and build its future. Finally, the process should equip victors with the alliances and coalitions they will need to function effectively in the presidency.

THE COSTS OF CAMPAIGNING

In recent years, there has been much hand-wringing about the high cost of politics. The 1996 elections cost more than any other previously, yet produced the lowest voter turnout since 1924. According to my calculations, during the 1995-96 election cycle, political candidates, committees, and other organizations and individuals spent a total of $4.2 billion on political campaigns. This spending covered not only campaigns for nomination and election to federal offices-the presidency and seats in Congress but also nomination and election campaigns for state and local offices; campaigns for and against ballot propositions; efforts by political parties and numerous independent organizations to register and turn out voters, and engage in issue advertising, and the costs of administering national, state, and local political party organizations and numerous political committees sponsored by interest and ideological groups. Undoubtedly, this election cycle, 1999-2000, will cost in excess of $5 bil

lion.

The $4.2 billion represents an increase of 32 percent over the 1991-92 election cycle. This increase far exceeded the 11.8 percent rise in the Consumer Price Index (CPI) during the period from 1992 to 1996. This increase was more than enough to stoke the fires of criticism of political campaigns costs, compounded by the revelations of high "soft money" spending and other questionable and contentious fund raising and spending practices.

Critics maintain that high campaign costs force candidates to devote an inordinate amount of time to raising money. They also hold that special interest groups seeking to exercise influence by satisfying candidates' needs for campaign funds threaten the integrity of the election and governmental processes. Compared with some other categories of spending, however, the amounts expended for political campaigns are low. The amount spent in 1995-96 is less than the sum that the nation's two leading commercial advertisers-Procter and Gamble and General Motorsspent in 1996 to proclaim the quality of their products. It represents a mere fraction of 1 percent of the $2.4 trillion spent in 1996 by federal, state, county and local gov

ernments.

There is no universally accepted criterion by which to determine when political spending becomes excessive. It is well to remember the old adage: to a candidate or a political party, the most expensive election is a lost election. No candidate or party wants to lose for having spent too little. During recent decades, political campaigning at most levels has become a highly professionalized undertaking, involving pollsters, media specialists, computer specialists, fund-raising consultants, and a host of other experts whose services are expensive and, in the estimation of many candidates and committees, essential. The costs of items and services many campaigns must purchase, including staff, travel, and broadcast time, have risen dramatically. In addition, federal and state laws enacted to compel disclosure of campaign finances and, in some cases, to impose limits on political contributions and expenditures and to provide public funding, have required candidates to hire election attorneys and accountants to ensure compliance. Candidates and political committees must compete for attention not only with each other but also with commercial advertisers that have access to large budgets and are able to advertise regularly in the electronic and print media-and not just during the campaign season. One answer I suggest is to produce an Index of Čampaign Costs. Current reliance on the Consumer Price Index (CPI) gives biased estimates because the CPI is not designed to cover such expensive campaign items as broadcast costs or fund-raising expenses or getting-out-the-vote costs. At least we should properly diagnose the problem and know its true dimensions.

CONTRIBUTION LIMITS

In setting contribution limits, a balance must be struck between the need to reduce public perceptions of excessive campaign funds and the need for candidates and parties to raise adequate funds to communicate with voters. Setting contribution limits too low can have the effect of turning public officials and candidates into

nonstop political fund raisers, seeking to collect sufficient money to enable them to convey their qualifications, records, and programs to the potential electorate. And low contribution limits may not produce enough money to fund challengers adequately. The federal limits on individual, PAC, and party contributions have not been raised since their adoption in 1974. But the value of the dollar has eroded by about two-thirds when the amounts are considered in constant dollars. Not only should the contribution limits be raised substantially, but they should be indexed with inflation in campaign costs and rounded to the next hundred dollars, for the future.

For these reasons, I endorse the Hagel, Kerrey, Landrieu bill, S.1816.

SOFT MONEY

The enactment of S.1816 would raise hard money contribution limits to reasonable levels, at the same time capping soft money contributions. These complementary actions would seek to convert some soft money into hard money, and would be of especial help to the political parties, enabling them to achieve some needed balance as between hard and soft money. Hard money is more desirable and more accountable through disclosure than is soft money. But the parties need to be weaned away from soft money slowly. It is worth remembering that soft money was enacted by the Congress in the 1979 Amendments at the urging of the two major parties because under the Federal Election Campaign Act (FECA) of 1971and the 1974 and 1976 Amendments, the parties had such a diminished role in the 1976 presidential campaigns.

The concept of soft money was designed to provide financial support to political parties to carry on party-building activities, including the essential functions of registration and get-out-the-vote drives. It was designed to be used at the state and local levels by party committees, but regulated by state law, and that is why-in the interests of party federalism-it was permitted to be money beyond the scope of the FECA. That some of it is now being used for "issue advertising" should not be an excuse to cut off party funding for these important activities. Complementarily, there is a crucial reason why the contribution limits to parties in hard money should be increased substantially at the same time.

I believe the parties can live with generous caps on soft money, but repealing it entirely and all at once would not be the right direction so long as hard money limits apply, even if those hard money limits are increased, as S.1816 would achieve.

REPEALING PARTY COORDINATED SPENDING LIMITS

The focus of campaign finance reform should be directed to meaningful steps that would permit the political parties to assist candidates in ways that would help remedy two acute and persistent campaign problems: (1) the increasing incidence of wealthy candidates spending excessively, exacerbated by both major parties which are seeking out wealthy candidates, in order to relieve the party organizations of helping to fund expensive campaigns; and (2) last-minute campaign blitzes triggered by wealthy candidates and outside interest groups in the form of usually negative independent expenditures and issue advertising.

For ideal campaign balance, both require costly response, and the latter particularly distorts the campaign process and threatens opposing candidates and parties with loss of control of their own campaigns by the introduction of issues-for example, term limits or right to life or labor union issues-the candidate or party may not wish to emphasize.

Pragmatic answers to these problems were contained in a House bill offered by a bipartisan group of freshmen legislators in 1997, and reintroduced in the current Congress by Representative Asa Hutchinson as H.R. 1867. It has two innovative provisions meriting serious consideration. One is to convert certain levels of soft money to hard money by raising the contribution limits for gifts to party committees, and then elevating them to a special status to be described shortly. A second is to repeal present coordinated spending limits, thus permitting unlimited party assistance to candidates confronted by either a wealthy candidate willing to maintain a barrage of advertising, or a last-minute attack put on by a better-funded opponent, or by an outside group spending money as a third force in a campaign.

The bipartisan freshmen bill put a $25,000 party limit on a different track, separating that limit from the $25,000 annual contribution limit for gifts for federal candidates and political action committees, thus enabling individuals to give a larger share of their contributions to national and state party committees, and accordingly paving the way to increase minimally the funding of the political parties in hard

money.