Campaign Finance Complications

Why the latest Senate reform bill is dead on arrival


Sens. John McCain (R-Ariz.) and Russ Feingold (D-Wisc.) plan to reform America's campaign finance system, thereby restoring honor and dignity to our political process, if not its actual office holders. The McCain-Feingold plan is scheduled to hit the Senate floor next Monday, where it promises to stay for two weeks. As in past years, the complex issue of campaign finance reform will be framed as a simple issue of pure reformers facing corrupt protectors of the status quo.

In fact, if a recent column by New York Times columnist Gail Collins is any indicator, it may even be presented as too complicated for workaday citizens to even understand. "If God really wanted campaign finance reform, he would have made it easier to understand," writes Collins. She advises citizens resort to blind faith–"assume there's no way to make things worse, and cross your fingers"–and follow the charisma. "McCain and Feingold aren't philosopher-kings, but on this particular issue their hearts are in the right place," writes Collins, adding, "This is a job for personality politics."

Actually, the task of deciding the rules under which our representatives will be selected ought not to be left to "personality politics." And while the myriad regulations concerning campaign finances–hard money, soft money, express advocacy, issue advocacy, independent expenditure–are totally mind-numbing, the core issues aren't particularly complicated. Here's what it comes down to: In a free, democratic society–one that cherishes freedom of speech and expression–who, if anyone, ought to regulate political speech? Should elected officials be allowed to insulate themselves from criticism, be it anonymous or otherwise?

A belief that there is too much money in politics–and that this money corrupts its recipients–drives campaign finance reform efforts. According the Bureau of National Affairs, in the 2000 election cycle, candidates, political parties, labor unions, and other interest groups spent a total of $4 billion to influence voters. That's a lot of money by most standards, except the one that's most relevant: $4 billion in total spending comes to roughly $14 per American. In the two years over which this money was spent, the federal government spent $3.5 trillion, or $12,500 per American.

And what, exactly, do campaign contributions fund? They pay for political communication, whether mass communication or direct communication. Anyone in the business of changing minds and influencing behavior knows that this is expensive. General Motors spent more than $2.6 billion to advertise its cars in 2000. The money to fund political communication must come from somewhere. Many reformers want it to be compelled, either by forcing broadcast outlets to give free air time to candidates, or by forcing taxpayers to fund campaigns. I prefer that it be voluntarily provided. It's bad enough that we have to pay for the political speech of those elected to office once they get in; they can at least pay their own way through the door.

Total money spent is one thing, but how it's raised is quite another. Raising money irks many politicians because it means they have to spend their time talking to their constituents and others whom their actions impact. It's also where appearances of impropriety, and actual corruption, arise, as when President Clinton pardons Marc Rich, whose wife was coincidentally oh-so-generous financially to The Man From Hope.

McCain and Feingold's holy war is against what is known as "soft money," the large sums of money that anyone, including unions and corporations, can give to political parties for "party building activities." (Soft money's counterpart is "hard money," or funds that go directly to candidates' campaigns; the amount of hard money any group or individual can spend in a given election cycle is sharply limited.) In the past, soft money was limited to activities such as voter registration and get out the vote drives. But among the Clinton administration's many political innovations was the spending of soft money on "issue ads" that discussed how specific Republicans such as Newt Gingrich and Bob Dole were planning to destroy Medicare. Because such ads stopped short of actually saying "vote for" or "vote against," anybody, they passed muster under Federal Election Commission guidelines for soft money expenditures. But these ads can and do operate as campaign ads, the kind that used to have to be bought with money raised in $1,000 and $5,000 increments from individuals and officially registered Political Action Committees.

McCain and Feingold want to prohibit political parties from accepting soft money and spending it on ads. This doesn't solve the underlying problem. It simply shifts it. The money that currently finds its way into party coffers won't disappear; it will move to other "independent organizations" that push agendas that hew closely to party lines. Reformers like this speech even less, because it is harder to identify the underlying agenda and trace.

To get at these groups, McCain and Feingold's legislation creates a new category of political speech, "electioneering communications," defined as electronic ads that mention the names or show likeness of candidates within 60 days of a general election or 30 days of a primary election, convention, or caucus. Labor unions and corporations would be prohibited from purchasing "electioneering communications," just as they are barred from giving money directly to candidates. Individuals and other groups that choose to express their political beliefs in this manner will have a whole new set of reporting requirements to meet. Because these requirements are both expensive and time-consuming to adhere to, they will keep small players out of the system. They will also identify very clearly for the politicians who's doing what, so that they can more easily punish individuals and groups who push unpopular agendas.

How is McCain and Feingold's latest skirmish in the war against political money likely to play out? Ironically–though predictably–politics are likely to intrude. As the debate on campaign finance draws near, it's dawning on Democrats that the soft money ban to which they've all publicly pledged their support (they're relying on Republicans to kill it), is in fact a loser for their party. Contrary to complaints that the GOP has a big edge in high-dollar donations, the Democrats have kept pace with the Republicans in the soft money race, raising $243 million to the Republicans $244 million in the last cycle. It's in the hard money race–dough that must be collected in small increments for specific candidates–that the Republicans whipped the Democrats, raising $447 million to the Democrats $270 million.

That late-breaking realization will help kill this latest reform idea. "There's no question we're shooting real bullets here," Sen. Mitch McConnell (R-Ky.) recently told the Washington Post. "And people are forced to actually read the bill for a change and to realize what's at stake here." Indeed, the senators are faced with that most hated choice for any elected politician: Vote for what they perceive to be their professional interest, or deliver on what they've promised to voters.

They will most likely find an honorable third way: propose amendments and add-ons that kill the bill while providing cover to vote against the package. The AFL-CIO already opposes the bill, since it prohibits labor unions as well as corporations from engaging in those newly defined "electioneering communications." Republicans will insist on so-called paycheck protection–the requirement that unions get permission from dues–paying members for any money spent on political activities. That'll make it even easier for Dems to vote nay.

Which means that the entire enterprise will likely collapse under the weight of its accumulated contradictions.

At least we can hope so.