[Congressional Record Volume 142, Number 104 (Tuesday, July 16, 1996)]
[House]
[Pages H7648-H7650]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  WELFARE AND CAMPAIGN FINANCE REFORM

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Texas [Ms. Jackson-Lee] is recognized for 5 minutes.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I could not help but come to 
the floor of the House in listening to the previous speaker argue so 
eloquently but yet with little substance on the question of welfare 
reform. In fact, I am not here to speak about welfare reform. I hope to 
be engaged in that debate as I have been engaged in the process of 
negotiating and trying to provide for the American people real welfare 
reform.
  Might I remind my Republican colleagues that though they claim some 
sort of hold on the idea of work, they vigorously oppose the increase 
in minimum wage to make work valuable for those single mothers who have 
to support their children. They have also opposed in any welfare reform 
the reality of having child care and job care and, yes, a job. I am 
reminded of Mayor Norquist of Wisconsin, I believe, who shared with me 
as I was a member of the National League of Cities Board of Directors 
when some many years ago we as city representatives were discussing 
real welfare reform. If I can recall, I believe that Mayor Norquist 
talked eloquently about the Wisconsin plan. It was not a handout, it 
was a handup. But one thing he emphasized is that they were concerned 
and worked hard to provide jobs for those individuals that would move 
off welfare. They first allowed them to seek jobs in the private sector 
but if they could not find such jobs, the local government provided 
opportunity for them.
  So I hope, Mr. Speaker, when we engage in this debate toward the end 
of the week, we will be forthright with the American people, that we 
will not hide the ball, if you will, that we will not give them a shiny 
bright apple that is permeated with worms; and that is that we will 
tell them and work for real welfare reform that includes jobs, that 
includes health care, that includes opportunity for child care.
  Let me now, Mr. Speaker, if I might, very briefly say that I come to 
the floor in support of the Farr bill on campaign reform, H.R. 3505, 
which I happen to be a cosponsor of. We too will be engaging in a 
fraudulent debate on reform at the end of the week, because we are not 
looking at the real issues. interestingly enough, the Farr bill has a 
candidate limitation where the candidates may spend no more than 
$50,000 of their own money.

  They ask for a candidate to declare a statement that they will abide 
by the limits of this legislation. They require that anyone who is 
advertising on television will be sensitive to the physically 
challenged and require closed captioning. They will also limit the 
amount of money that can go to national parties by PAC's. That is real 
campaign finance reform.
  Mr. Speaker, I also want to comment on the opposition to H.R. 3760, 
the Republican bill, where, for example, they call it reform to allow 
individuals to get more than $1,000 up to $2,500 per election, when 
they call it reform to allow PAC's to give not $25,000 but $72,500 a 
year, when they call it reform when the maximum amount individuals can 
give to any one political party goes from $20,000 to $58,000 a year; 
and furthermore these amounts will not count toward the new $72,500 
cumulative limit.
  It is interesting that Members of their own party are opposed to this 
kind of campaign finance reform. I do believe that reform should be 
bipartisan.
  I think the Farr bill offers a clear and pointed response that allows 
those who come to this elective process, not wealthy, but simply 
wanting to serve the American people, that they will have a fair shake 
in being represented. I think that we should have a bipartisan approach 
to campaign finance reform. We have that opportunity this week. I hope 
that we will not cast aside that opportunity and that we will show the 
American people we can stand up, one, for welfare reform, the right 
kind, but real reform and campaign finance reform; we will stand up for 
the physically challenged, we will not allow large sums to be given on 
an individual basis from $1,000 to $2,500; we will not pack the PAC's 
from $25,000 to $72,000; and, yes, we will not allow individuals to 
give to the political parties, the political party committee, moneys 
from $20,000 to $58,000 as we will recognize that it is important that 
candidates declare themselves committed to campaign finance reform, 
allowing themselves to sign on and to abide by these rules.
  This is the challenge that we have in the U.S. Congress this week, to 
leave this week, proud of what we have done, voting for real welfare 
reform, giving people a hand up and not a handout; not casting aside 
those individuals who need help, those young mothers who have children 
who can in fact become independent if we provide for them the right 
kind of bridge; and yes, to show the American people that we are not 
afraid of real campaign finance reform and we are not going to hide 
behind a fraudulent bill as our Republican colleagues have offered, but 
yet other Republican colleagues likewise have disagreed with.
  We hope that these colleagues can join with us and support the Farr 
bill, real campaign finance reform.
  Mr. Speaker, I submit the summary of the Farr bill, H.R. 3505, for 
the Record.

            Farr Bill on Campaign Finance Reform--H.R. 3505


                        campaign spending limits

       Limits apply to a full 2-year cycle.
       Voluntary limits of $600,000 (indexed for inflation, with 
     1996 as the base year).
       Special election limits of $600,000.
       Closely contested primaries: an additional $200,000 may be 
     spent in the general election

[[Page H7649]]

     by a candidate who won primary by 20 percent or less.
       Runoff contests: an additional $200,000 may be spent by a 
     candidate who must face a runoff election after a primary 
     election but before a general election.


                      candidates personal spending

       Candidates may spend no more than $50,000 of their personal 
     funds in a cycle.


                      carryover of campaign funds

       Surpluses may be transferred from one cycle to the next for 
     use in the next election cycle.


                    exemptions from spending limits

       Spending limits will be lifted on a participating candidate 
     when a non-participating opponent raises or spends more than 
     30 percent of the cycle limit (benefits will still accrue to 
     the participating candidate).


                        independent expenditures

       Spending limits are lifted for the participating candidate 
     to the extent that independent expenditures are made against 
     the participating candidate or for an opponent in a general 
     election once any single source makes such an expenditure 
     totaling $2,500 or once such expenditures from multiple 
     sources aggregate $5,000. When independent expenditures reach 
     an aggregate of $15,000, the spending limit is lifted 
     entirely on the participating candidate against whom the 
     independent expenditures are targeted. Party committees can 
     match independent expenditures without the expenditure 
     counting against that party's contribution limit to the 
     candidate.


                  legal and post-election audit costs

       Costs associated with legal expenses and post-election 
     audits shall not be counted as an expenditure for purposes of 
     calculating spending under the limit; funds raised to cover 
     the legal and post-election audit expenses shall not count 
     against contribution limits.


              fundraising and accounting compliance costs

       Up to 10 percent of the basic cycle limit may be spent on 
     fundraising activities and not be counted as an expenditure 
     for purposes of calculating spending under the limit; (up to 
     10 percent of salaries and overhead costs may apply to 
     exemption); funds raised to cover the fundraising and 
     accounting compliance expenses shall not count against 
     contribution limits.


                                 taxes

       Federal, State and local income and payroll taxes are 
     exempt from limits and shall not be counted as an expenditure 
     for purposes of calculating spending under the limit; funds 
     raised to cover tax expenses shall not count against 
     contribution limits.


              Penalties for Violating the Spending Limits

       Civil penalties for exceeding the spending limit shall 
     include fines assessed against the campaign committee based 
     on the amount of the overage:
       Overage of 2.5 percent or less: the amount of the overage;
       Overage between 2.5 and 5 percent: 3 times the overage;
       Overage of 5 percent or more: 3 times the overage plus an 
     additional penalty amount to be determined by the FEC;
       Revenues from these penalties shall be directed to the FEC 
     for compliance activities.


     Incentives to Voluntarily Abide by Limits; Disincentives for 
                             Noncompliance

       Incentives/Benefits to those who comply:
       Broadcast rate discount: requires broadcasters to sell time 
     to participating candidates at 50 percent of the lowest unit 
     rate in the last 30 days of a primary election period and in 
     the last 60 days of a general election period; there shall be 
     no limit on the dollar amount or value of the broadcast time 
     purchased at this rate under this provision.
       Discounted broadcast time is made an express condition of 
     existing licenses and new broadcast licenses. Broadcaster 
     will be exempted from these requirements if their signal is 
     broadcast nationwide or if the requirement would impose a 
     significant economic hardship on the licensee. The U.S. Court 
     of Federal Claims has exclusive jurisdiction over any 
     challenge to the constitutionality of the broadcast 
     provisions.
       Postage rate discount: makes the campaigns of participating 
     candidates eligible for 3rd class, bulk, non-profit rate for 
     mail; there shall be no limit on the dollar amount or value 
     of the postage purchased at this rate under this provision.
       Disincentives for non-participation:
       Non-participating candidates who raise or spend more than 
     30 percent of cycle limit must file report with the FEC, 
     which must then notify other candidates within 48 hours.
       Imposes 35 percent tax on contributions of principal 
     campaign committees whose candidates exceed the spending 
     limits; revenues from this provision shall be directed to the 
     FEC for compliance activities.
       Non-participating candidates shall not be entitled to the 
     lowest unit rate for TV broadcast time.


                        Eligibility for Benefits

       Fundraising threshold: 10 percent of cycle limit counting 
     only the first $200 in contributions from individuals.
       Intention to abide by limits: candidate must file statement 
     with declaration of candidacy.
       Candidate must have an opponent in the election in which 
     public benefits are to be used.
       Closed captioning: no public benefits to candidates who do 
     not use closed captioning in TV ads.
       Violation of any of the spending limits makes a candidate 
     ineligible for public benefits.


      Sources of funds, PAC Limitations, Individual Contributions

       PAC contributions: $8000 per candidate, per election cycle; 
     no more than $5000 per election.
       Aggregate PAC receipts limit: 33\1/3\ percent of spending 
     limit, plus an extra $100,000 if runoff and $66,600 if close 
     primary winner.
       To national parties: no PAC shall make contributions to a 
     national party committee aggregating more than $25,000 per 
     calendar year.
       To state parties: no PAC shall make contributions in excess 
     of $25,000 to a state party Grassroots Fund; $5000 to any 
     other state party committee; $15,000 total to Grassroots Fund 
     and other committees.
       Leadership PACs: eliminates leadership PACs as of Dec. 31, 
     1996 but allows for a two-year phase out of existing funds.
       Large donor limits: candidates may accept no more than 
     33\1/3\ percent of the spending limit from individuals in 
     aggregate amounts of more than $200; plus an extra $100,000 
     if runoff and $66,600 if close primary winner; large donor 
     limit removed on participating candidate if nonparticipating 
     opponent exceeds $50,000 limit on personal spending.
       Aggregate individual contribution limit: changes aggregate 
     limit to election cycle basis and raises it to $100,000, of 
     which no more than $25,000 may go to candidates per year.
       Party contributions: counts all state and local party 
     contributions to a Federal candidate against that party's 
     limit.
       Civil penalties for exceeding the contribution limit shall 
     include fines of assessed against the campaign committee 
     based on the amount of the overage:
       Overage of 2.5 percent of less: the amount of the overage;
       Overage between 2.5 and 5 percent: 3 times the overage;
       Overage of 5 percent or more: 3 times the overage plus an 
     additional penalty amount to be determined by the FEC;
       Revenues from these penalties shall be directed to the FEC 
     for compliance activities.


                        independent expenditures

       Defines independent expenditure to mean a communication 
     containing ``express advocacy,'' (i.e., if, taken as a whole, 
     it suggests taking action to support or oppose a candidate or 
     group of candidates), and is not coordinated with a candidate 
     or candidate's agent.
       Prohibits independent expenditures:
       By candidate's or political party committee;
       Where there has been any arrangement, coordination or 
     direction between candidate or agents and spender;
       Where spender has been authorized to raise funds or has 
     worked in a policy making capacity for a candidate;
       Where spender has retained professional services of agents 
     also retained during election cycle by candidate affected by 
     spender's activity.
       Reporting requirements, to be sent to FEC and Secretary of 
     State:
       Notification within 48 hours of independent expenditures 
     each time they total $2500 from a single source or aggregate 
     at least $5000, until 20th day before election;
       Notification by 20th day before election of intent to make 
     independent expenditures in last 20 days;
       FEC must notify all candidates in that election within 48 
     hours of these independent expenditures.
       Requires enhanced disclaimer on independent ads, to include 
     spoken statement of who is responsible and, if on TV, a 
     clearly printed message as well (with reasonable contrast, 
     for at least 4 seconds)
       If a broadcast expenditure is made against a participating 
     candidate or for an opponent, the person making that 
     expenditure must notify the affected candidate, and provide a 
     script of ad within 48 hours of making the expenditure. The 
     broadcaster must offer the affected candidate an equal 
     opportunity to respond without advance payment required.
       Participating candidates may spend in excess of spending 
     limits (in primary or general) to compensate for independent 
     ads against them or for opponent, once in excess of $2500 by 
     a single spender or $5000 aggregate.


                                bundling

       Contributions through intermediary or conduit to be counted 
     against intermediary's contribution limit, if intermediary is 
     a:
       PAC with a connected organization;
       Union, corporation, trade association, or national bank;
       Someone required to register as a lobbyist; or
       Agents or employees of above groups acting on behalf of 
     those groups.
       The following may serve as intermediary or conduit;
       Candidate or representative, if transmitting donation to 
     candidate's committee;
       Professional fundraiser (for fee);
       Volunteer hosting house party; or
       Individual transmitting spouse's donation.
       Restrictions do not apply to joint fundraising activities 
     by 2 or more candidates, party committees, or combination, or 
     sole effort by other candidate.
       Requires intermediary or conduit to report original source 
     and intended recipient to FEC and to recipient.

[[Page H7650]]

                               soft money

       Makes these activities subject to FECA:
       GOTV drive not solely for State candidates and which don't 
     identify and are targeted at supporters of Federal 
     candidates;
       Any activities which in part promote or identify Federal 
     candidates;
       Voter registration drives;
       Development and maintenance of voter files in even-numbered 
     year;
       Any activity which significantly affects Federal elections.
       Makes these activities not subject to FECA:
       Cost of party building or to operate radio or TV facility;
       Contributions to non-Federal candidates;
       Money for State or local conventions;
       Activities exclusively on behalf of or which only identify 
     non-Federal candidates;
       State or local party administrative expenses;
       Research for solely State or local candidates and issues;
       Development and maintenance of voter files except for one 
     year before Federal election;
       Any activities solely aimed at influencing and which only 
     affect non-Federal elections;
       Generic campaign activity to promote a political party 
     rather than any particular candidate.
       Creates new separate segregated fund established and 
     maintained by State political party committee for making 
     expenditures in connection with Federal elections.
       Prohibits use of soft money for any party activity that is 
     subject to FECA or that significantly affects a Federal 
     election.
       National and congressional party committee must disclose 
     all financial activity, regardless of whether it is in 
     connection with Federal election; other political committees 
     must maintain a non-Federal account and must disclose all 
     financial activity including separate schedules for State 
     Party Grassroots Funds; FEC may require other nonparty 
     political committees to disclose receipts or disbursements in 
     Federal elections which are also used to affect State and 
     local elections.
       Prohibits Federal candidates of officeholders from raising 
     any money for a tax exempt group which they establish, 
     maintain, or control, and which devotes significant 
     activities to voter registration and GOTV drives.


                          campaign advertising

       Prohibits broadcasters from preempting ads sold to 
     participating candidates at 50 percent of the lowest unit 
     rate, unless beyond broadcaster's control.
       Requires 50 percent of the lowest unit rate to be available 
     to participating candidates in last 30 days before primary 
     election and 60 days before general election; non-
     participating candidates shall not be eligible for lowest 
     unit rate.
       Lowest unit charge of a station is for the same amount of 
     time for the same period.
       Requires clear statement of responsibility in ads, with: 
     clearly readable type and color contrasts (print); clearly 
     readable type, color contrasts, candidate image, and for at 
     least 4 seconds (TV); and candidate's spoken message (radio 
     and TV).


                        disclosure requirements

       Requires candidates to aggregate financial activity on 
     election cycle basis.
       Defines election cycle from day after last general election 
     to date of next general election for that office.
       Requires ID of individuals by permanent residence address.
       Allows candidate committees to file monthly reports in all 
     years.
       Incorporated political committees: requires reporting of 
     state of incorporation and the names and address of officers.
       Requires candidate committees to report disbursements for 
     the primary, general, and any other election in which the 
     candidate participates.
       Requires disclosure of the name and address of each person 
     receiving an expenditure over $200 and the election to which 
     each operating expense relates.


                    miscellaneous provisions/reforms

       Contributions by dependents not of voting age: counts 
     contributions toward limit of parent (allocated between both 
     parents, if relevant).
       Use of candidates' names: requires authorized committee to 
     include candidate's name in its title; prohibits non-
     authorized committees (other than parties) from including 
     candidate's name in its title or to use name to suggest 
     authorization.
       Fraudulent solicitation of contributions: prohibits 
     solicitation of funds by false representation as a candidate, 
     committee, political party, or agent thereof.
       Advances by campaign workers: exempts advances of less than 
     $500 made to campaign by volunteers and employees, if 
     reimbursed within 10 days.
       Labor and corporate expenditures for candidate debates, 
     voter guides or voting records: not counted as contributions, 
     unless expressly advocating election or defeat of a candidate 
     and under specific circumstances to ensure impartiality.
       Telephone voting by persons with disabilities: requires FEC 
     to develop feasibility study.
       Cash contributions: prohibits candidates from accepting (as 
     well as individuals from making) cash contributions which 
     aggregate more than $100.
       Expedited review: provides expedited appeal to Supreme 
     Court of any court ruling on constitutionality of any 
     provision of the Act.
       FEC regulations: requires FEC to promulgate regulations to 
     carry out provisions of this Act with 12 months of effective 
     date.
       Effective date: upon enactment, but does not apply to 
     activity in elections before January 1, 1997.
       Severability: if any parts of the Act are held invalid, 
     other provisions of the Act are unaffected.

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