The Future of Campaign Finance Reform: Constitutional Challenges, Political Realities

Transcript

MR. THOMAS E. MANN: Good morning. I'm Tom Mann, a Senior Fellow here at Brookings, and I am delighted to welcome all of you, welcome many of you back to what has been a series of briefings on the long saga of campaign finance reform.

For those of you who were fans of the Grateful Dead I would offer you their line, "It's been a long, strange trip" to campaign finance reform. That's in Trucking, circa 1971, Norm, just— (Laughter)

MR. NORMAN J. ORNSTEIN: You weren't even born then!

MR. MANN: But it's not over yet, and it never will be. Campaign finance reform will be with us as it is with every country for a long long and unending process.

I am delighted to welcome our live C-Span audience and I encourage you to send questions to our panel. That should go to communications@brookings.edu.

Brookings is co-sponsoring this event with the American Enterprise Institute and with the new Campaign and Media Legal Center which has just opened its doors and has startup funding from The Pew Charitable Trusts.

I would also like to mention, since I always do, that the Brookings campaign finance website continues to be a resource for those who are following this debate. We have now up on the site, the newest element is a chapter by Dan Ortiz on the constitutional issues involved in the current debate. But as we did in the House, we'll be updating this on a regular basis, and as if anticipated the legislation eventually becomes law we will be posting many materials on the constitutional odyssey as well.

Our format today is simple. We're going to try to be conversational. We're going to try to give you an opportunity to ask all the questions you would want. Our subject matter is divided into three parts. We're first going to talk about the current situation in the Senate, then the constitutional challenges if the legislation becomes law. And finally, the possible responses to a new law by various political actors.

To give you a preview of our discussion and I hope I'm not stepping on any of our panelists' toes, my guess is that we all believe that the McCain-Feingold/Shays-Meehan legislation is likely to be enacted and signed into law. We believe that constitutional challenges by no means doom this legislation but there are real uncertainties about various parts of it. And that the major elements of the legislation are unlikely to be overwhelmed by the infamous law of unintended consequences.

I think many people don't realize that a lot of serious constitutional and practical political thinking has gone into this effort. The days of naivete and hyperbole in the reformers' camp has given way to realism and pragmatism. The legislation is modest in its ambitions. I have referred to it as trying to restore the status quo ante pre-1996.

Complexities in the legislation and adjustments by actors are fully anticipated. I think they will not be a surprise. This legislation is an initial step but by no means the last one.

We've assembled, present company excepted, a distinguished panel, but we have not provided you with another opportunity for a partisan or ideological crossfire on campaign finance reform. All of us will try to be as objective and fair-minded as possible, but we all view recent developments in the House favorably and have played or will play some role in seeing this legislation through formulation, enactment, court challenges, implementation, and then further analysis of the consequences and of additional changes in law that are merited.

So truth in billing about who we are and what we generally believe and what we aspire to in our session today.

Our participants include Randy Moss to my right who is a partner in Wilmer Cutler & Pickering. He's a former Assistant Attorney General in the Office of Legal Counsel during the Clinton Administration and will be part of the legal team defending the legislation if in fact it becomes law.

Norm Ornstein on my far left, a long-time colleague and collaborator. Only physically is he on my far left, just to clarify that. (Laughter) A resident scholar at AEI, Director of their Campaign Finance Project, and the leader of the "gang of five" that along with myself and Tony Corrado, Michael Malbin, and Paul Taylor produced in late 1996 "Five Ideas for Campaign Reform" that helped us begin to alter the agenda within the reform community.

Then on my right, Dan Ortiz, who is the John Allan Love Professor of Law and the Joseph C. Carter, Jr., Research Professor of Law at the University of Virginia. He's the only man I know who holds, not sits in, two chairs at the same time. Dan is a distinguished legal scholar of election law and had a hand in advising and formulating language that became the Snow-Jeffords Amendment on issue advocacy that was embedded in McCain-Feingold.

Finally, Trevor Potter, a non-resident Senior Fellow at Brookings, a partner at Caplin & Drysdale, the General Counsel of this new Campaign and Media Legal Center, former Chairman of the FEC and counsel to Senator John McCain.

That's our panel, let's begin our discussion.

Norm, Senator McConnell has implied in several statements that the battle is basically over, but he appears not to be acting fully on that assumption. What's the current state of play in the Senate?

MR. ORNSTEIN: Starting with your original observation, Tom, it has been a long strange trip and most of us didn't believe we would get to this point at this stage.

I think for the last 20 years when people have asked me, "where are we with campaign finance reform," my stock answer has been I've not yet reserved my seat at the signing ceremony, but we're getting close to the point where Ticketron may be called.

But I also can't resist an observation that I've made to you many times, that the strange trip was particularly striking on the Floor of the House when, and you couldn't make this up, the top three visible opponents of campaign finance reform were named Ney, Doolittle and DeLay. (Laughter) And I am actually hoping now that they will recruit Olympic speedskater Apolo Ohno to join their group for the next wave of reform on which we will start working the day after this one passes because it is incremental reform.

Where we are is in the Senate, which means we don't exactly know where we are. The Senate returned at the beginning of this week, the expectation being that they would have a day to dispatch with election reform because we had a deal. That day is a legislative day which could drag on for a substantial period of time and we will soon get to the energy bill.

There has been now pretty much a commitment that at some point along the way either, perhaps before energy is taken up, more likely as soon as energy is dispatched with or possibly even in the middle of energy, but with the expectation by Majority Leader Daschle that it will be dealt with before the end of the month of March, campaign finance reform will come up.

We know that after the House passed the bill Senator McConnell, the leader of course of the forces opposing McCain-Feingold/Shays-Meehan in the Senate indicated he would keep his options open with an expectation very possibly of a filibuster, but then saw that there were not going to be 60 votes. He and Senator Lott have said that they aren't going to provide that kind of steep opposition. But Senator McConnell also said that he has a series of technical amendments that he wants to offer and he clearly would like to do something that would force a move to a conference committee. It's not going to happen.

Senators McCain, Feingold and Daschle have basically told Senators Lott and McConnell that they would be happy to consider technical provisions as a separate bill and they would be happy to bring to the Floor unanimous consent agreement that any technical set of amendments that were agreed to by McCain, Feingold, Daschle, McConnell and Lott would be brought up immediately and passed under unanimous consent to head off the notion that this would be done in another fashion. But they're all sitting there expecting that Senator McConnell will probably try and do something else, and trying to see if they can find a time or a way to bring this up where it could be dealt with in just a few hours.

At this point it's not clear whether they'll resolve their election reform controversy and move it along, whether energy, which of course has its own areas of controversy including CAFE standards and the drilling in ANWR could end up being filibustered itself, just as election reform could end up being filibustered and we could have two other extended debates before we get to this. But I believe that Senator Daschle, not wanting to delay this beyond the month of March, will choose a time to bring this up before the month is out and force action on it and almost certainly it will get through, and then the President will have some period of time to decide whether he wants to sign this with a ceremony, let it go without any kind of fanfare, or as the Wall Street Journal in a last-gasp editorial the other day said, go against everybody's conventional wisdom and in fact veto it. I think it will be signed and then we will begin this expedited action for the courts probably, my guess would be sometime late in April or early May.

MR. MANN: Trevor, some of the items on Senator McConnell's list of technical amendments look pretty substantive to me, like changing the Levin Amendment amount of soft money contributions to state and local parties. What do you know of what's going on there?

MR. TREVOR POTTER: There's an old saying, Tom, which is when you have the votes, vote; when you don't have the votes, delay. What we're seeing here I think is an attempt by Senator McConnell to slow down the process and see if the dynamics can be changed. Because I think looking at it as you do, coming out of the vote in the House, it appears as if there are enough senators to shut off a filibuster and proceed to a vote. There are enough senators to vote down any amendments when the bill comes to the Floor.

So if you're Senator McConnell what you want to do is slow this down and see if you can get something to change. One of the things the senator has done is to say that while he expects the bill to pass he would like it to be improved. Now that's barely cloaked, but it is an absolute killer approach to the bill. It's important to be clear about that because this bill cannot be amended on the Floor of the Senate and continue on to the President. It would then have to stagger back to the House to be voted on again if it's changed in the Senate.

So the first distinction between what Senator McConnell has proposed and what Senator McCain has stated is possible is whether you're going to amend the bill which Senator McCain has said he is simply, he is not going to allow in terms of his votes or whether you are going to have some sort of later technical corrections bill. McCain's point has been, his position has been he would be willing to look at changes that could be made of a technical nature after the campaign finance reform bill has been enacted into law, signed by the President, and not until then because he doesn't want to end up in a position where the two are linked or where there is pressure to amend this original bill on the Senate Floor.

In terms of what Senator McConnell has said he's looking at, basically he would like to change as much of the bill as he can since he doesn't like the bill. Some of his proposals are very substantive. I think the McCain view is that the bill is fine, it doesn't need technical amendments, and if there is something that needs to be done it can be done in Floor colloquy in terms of clarifying some of the potentially gray areas, although again I think the McCain view would be it's pretty straightforward. But that's going to be this discussion or this dance as to whether there are any changes, and if so can they be put in a separate bill and is there even a need for that.

MR. MANN: In procedural terms isn't it the case that McConnell has the right to offer amendments and get votes on amendments? That is, Daschle can't move to close off that opportunity. So he could keep this going for awhile, even if he wasn't explicitly filibustering. But isn't it also the case that he would likely lose on each of those amendments?

MR. POTTER: You have to have an agreement on the rule and possibly the Majority Leader could try to have a closed rule. It seems more likely that he would have a rule with a certain number of amendments permitted and a limit on debate. If that limit isn't abided with you're instead in filibuster territory. So one way or another it's likely you would have votes on amendments, but given there were 57 votes to pass the bill, 59 votes originally that we're looking at, we think no amendment itself is going to pass on the Floor, particularly if it's made clear that that has the effect of sending the bill back to the House or to conference.

MR. MANN: I think that basically summarizes our view that the whole political dynamic has changed. That it would be very difficult at this point to kill this legislation, but it is possible to slow it down. The real question now is whether it will emerge successfully from the Senate in its present form on the way to be dispatched to the President before the recess in late March.

MR. POTTER: This is still though a perilous time because it doesn't have a place to get to the Floor. It's an odd situation where it's there ready to go but there is no room on the Floor. Senator Daschle has committed he will bring up energy first. Unless that itself gets into a filibuster and the senator is able to pull that off you don't know when it's going to get to the Floor. An awful lot can happen in the mean time. Just looking at what I've been seeing coming in over the internet, the opponents of this bill have really charged up. They're doing a phone campaign, they're doing an e-mail campaign, they're doing a fax campaign. They are targeting the Republican senators who voted for this bill and who they think might be persuaded or bludgeoned into changing their mind at the last minute.

MR. ORNSTEIN: Tom, let me just clarify, the way this— This can work in one of two ways. The first way is there is a unanimous consent agreement to proceed on this with a very limited period of time and a set number of votes. Then of course any single senator can object to that.

One of the things that's been happening, at least a little bit behind the scenes is that McConnell and McCain have been talking, not so much directly although they're going to talk directly, about whether they can come to an overall agreement and reach that level.

The other, more likely, is that you don't get a unanimous consent agreement in which case you can take to the Floor, anybody could initiate even a filibuster. Then you'd have a motion for cloture. If that motion succeeded, which means cutting off debate and they appear certainly to have the 60 votes to do that, then you have a period of time in which there are votes on amendments, I believe it's 100 hours if I'm not mistaken. Is that right Mike? Up to 100 hours and germane amendments that have been filed to that point can be brought up.

So you could limit the debate if you can get those 60 votes for cloture but you could still have a very extended period of time that could drag this on for quite awhile.

But the complication here is that Daschle has agreed to a UC on the energy bill and Republicans, all Republicans, including supporters of McCain-Feingold, might view it as a breach of a UC if he were to set aside that bill to take up campaign finance. And since we anticipate a Democratic filibuster on the ANWR provision of the energy bill, you can see how this could push into the March recess.

MR. POTTER: Although what Lott has said on the Floor of the Senate is that he would understand if Senator Daschle felt he needed to put aside energy if that bogs down. There's a window there.

MR. MANN: There is a window. Okay.

We are going to move on now to the constitutional challenges, but if anyone has a question about the current state of play they would like to raise at this point I would entertain it. If not, let's move on to our second topic.

I'd like to pose a question to Dan Ortiz. The most controversial legal and constitutional provision of McCain-Feingold/Shays-Meehan deals with so-called sham issue advocacy.

What's the constitutional thinking or strategy of the proponents of this legislation that makes them believe that their language could pass muster?

MR. DANIEL R. ORTIZ: Well Tom, Shays-Meehan/McCain-Feingold take a pretty novel and I think sophisticated approach to all of this. Prior proposals pretty much took a blunt approach, treated all kinds of electioneering communications pretty much the same. And what Shays-Meehan and McCain-Feingold try to do is tease apart different types of advertising, depending on how much the danger of corruption the particular type of advertising poses and how much regulating a particular type of electioneering communication would burden constitutionally protected expressive and associational interests.

And what it does is it follows very strong line Supreme Court jurisprudence which treats spending by economic corporations and unions on the one hand differently from spending by individuals. The Supreme Court has basically said that spending by economic corporations and unions is not strongly protected, whereas spending by individuals really is. We've got the Austin case on the one hand and Buckley v. Valeo on the other.

So what Shays-Meehan/McCain-Feingold does is it takes a two-track approach to all of this. With respect to spending coming from economic corporations/unions, entities like that, you basically find a strategy of prohibition. With respect to individuals on the other hand, you find a strategy of disclosure. That kind of spending is permissible, you just have to disclose it in certain kinds of ways. Pretty much adhering to the structure of the constitutional rules.

Let me describe for a moment how the actual rules operate. I'll put aside for just a moment the actual definition of electioneering communication because that's worth some separate discussion itself. But basically economic corporations unions can't spend money for electioneering communications, individuals can but have to disclose. The interesting category then is well what do you do about non-economic corporations—501(c)3s, that sort of thing.

The third category is a little bit problematical and they actually came, to my mind, a fairly interesting solution there.

If no contributions from unions or economic corporations come in, no problem. Spend as much as you want on the stuff subject to disclosure and preserving your tax exempt status.

If contributions do come in from those other kinds of entities, and again the worry here is that some people, corporations might try to use these tax exempt entities as sort of conduits to circumvent the prohibitions that they find on their own spending, the non-profit basically has three alternatives.

One, it can basically spend nothing, so it can find itself in, if it doesn't want to take any care to sort of manage its monies internally, will be treated as an economic corporation.

On the other hand the non-profit can segregate out the corporate monies, the union monies it received. If it's only spending for electioneering communications from a pool to which economic corporations and unions have not contributed, no problem. But again, they have to disclose. So they're treated sort of as individuals in that and they have to disclose the underlying contributors of more than $1,000 in a calendar year up to the date of disclosure.

Or if they're worried about actually disclosing the names of all their contributors they have a third alternative available to them which is they can segregate the account where the money for electioneering communications is coming from, and just use a little tiny pocket of money and at that point, if they choose to go that route, they only have to disclose the contributors to that pool that is intended for electioneering communications.

As I said, there's a very novel and interesting approach there which tries to adhere pretty closely to what looks like the rules that the Supreme Court has laid down.

Now the actual definition of electioneering communication itself is also novel. Basically what the drafters tried to do is affect expression as little as possible while minimizing the danger of corruption. They did that by trying to chop out large areas of expression that wouldn't be covered at all. And they did that along four basic dimensions. The how of the communication, the what of the communication, the when of the communication and the who of the communication if you want to call it that.

First, the how. The electioneering communications only really covers broadcast, cable or satellite communications. Not direct mail, not door to door, not newspaper, none of that. So there is a whole area of communication that doesn't really fall under the regulation at all.

Second, the what. It only covers communications that refer to a clearly identified candidate. If you're discussing issues without clearly identifying a candidate, again, not covered at all.

The when, the timing. It only covers communications that occur within 60 days of a general special or runoff election or within 30 days of a primary election.

And as to the who, this goes to the audience. It only covers those communications that are actually targeted to the particular place where the race would be occurring. The targeting means basically it's accessible by at least 50,000 people either in the congressional district if we're talking about a House election, or a state if we're talking about a Senate election.

Now the regulation is a little bit deceiving. Some people at first glance are saying, "my Lord, what they're doing is they're going out there and grabbing at all this expression along all these different means," but they actually get it exactly backwards. What the drafters were doing is trying to exclude large parts of expression to make sure they don't even come anywhere near the regulation here.

There's also a kind of backup provision which is kind of interesting strategy here, where the drafters actually said well, if for some reason that bothers the Supreme Court there's another definition of electioneering communications which we can give.

A final thing, I think it's important to realize that all of this legislation takes place against the background of constitutional rules which are in a sense incorporated into it and affect its reach in particular places. So for example there is a well, a long-established rule established in the case called the American Socialist Workers Party which says that the government can't force disclosure of members of a particular group or contributors to a particular group if that group is very unpopular and it would create an undue burden on the associational interests of people who want to join to form the group. So you're thinking very unpopular political parties or something like that.

So although the language of Shays-Meehan/McCain-Feingold doesn't actually put in that exclusion it's sort of understood because it's building upon ground which already has, if you want to put it this way, easements running across and you're building subject to all those easements. So when you're thinking about the scope of the legislation you have to think of it not as it's drafted, but in terms of the larger framework against which the legislation itself operates.

MR. MANN: Thank you, Dan.

In the course of our conversation we will take up the question of how the Wellstone Amendment may have altered in any way this situation and whether that provides any sort of new constitutional vulnerabilities for the strategy that was originally proposed by those formulating this legislation as well as the so-called MCFL exemption that the Supreme Court has weighed in.

But why don't we set that aside for a moment and turn to Randy just initially to get a sense of how this court challenge is likely to proceed. Who will be the party or parties? What standing will they have? What venue can we anticipate? What timing? What appeals procedures? Who's going to defend the legislation? Will there be multiple defenses? How do they work together, or possibly at odds? What can you tell us about this?

MR. RANDOLPH MOSS: I'm not very good at predicting how even the simplest litigation will proceed, but let me give this a shot.

A couple of things we do know with a fairly high degree of certainty. The litigation will almost certainly be brought. It will be brought in the District of Columbia. The law specifies that it will be heard by a three-judge District Court. There will be two District Court judges and one Court of Appeals judge who will hear the case. There will not be an appeal to the Court of Appeals, but there will be an appeal as of right to the Supreme Court.

The statute directs that to the extent possible the three judge District Court and the Supreme Court expedite consideration of the case.

With respect to who the parties will be, it's difficult to say that until a lawsuit is brought. I believe that Senator McConnell has announced that he will bring a lawsuit, so that's one. I think it's likely that there will be other plaintiffs. If I were working with a plaintiff in putting together the lawsuit I certainly would think about trying to find representative plaintiffs from every area in which the law has a significant effect.

In Buckley v. Valeo there was a candidate for President who was a plaintiff; there was a senator seeking reelection; there was a potential contributor; there were various interest groups including the ACLU; and there was a state party.

On the defendant's side, again until the plaintiffs bring their lawsuit we won't know who they choose to name. In Buckley v. Valeo, Valeo was the Secretary of the Senate. In addition, the Clerk of the House was named. At that time the Federal Election Commission was just in the process of being created, but was also named. The Attorney General was named; the Comptroller General was named; and others intervened as defendants in the litigation.

There is a provision in the statute or the bill that authorizes members of either house to intervene as of right in the litigation on either side of the case, so we could well see intervenors from both sides, from both houses of Congress. Recognizing what may be the cumbersomeness of having all of these parties in the litigation, the statute specifies something which I think would probably have been the case in any event, but that the District Court would have the authority to direct that intervenors who share a common position to the extent practicable file a single brief in the case.

With respect to timing, we can look to the Buckley v. Valeo perhaps as an example, although I frankly think that this will be a more straightforward lawsuit and hopefully will not generate the pages and pages of opinion from both the Court of Appeals and the Supreme Court from Buckley. But from the time the Act was enacted that was challenged in Buckleyto the final decision from the Supreme Court, it was only 15 months. From the time of enactment until the Court of Appeals decided the case it was ten months. And in Buckleythere was an unusual procedure where the case was brought in the District Court but constitutional questions were immediately certified to the Court of Appeals. The Court of Appeals then turned around and sent the case back down to the District Court and said can you find the facts for us. The District Court found the facts principally through stipulation and the case went back up to the Court of Appeals which then issued its decision.

The time between the argument in the Supreme Court and the issuance of the multi, probably 100 page if not longer decision of the Supreme Court was only 11 weeks. So I think that the case once filed is going to move pretty quickly. I think there's going to be a desire to move the case quickly.

The Act is not effective in any respect until next November and I think there is going to be a desire in the courts and among the litigants to try and get things settled as close to that date as possible.

MR. MANN: Let me press one other matter. Dan addressed one of the two central elements of this legislation, the issue advocacy electioneering provision. The other, of course, is the ban on soft money. What can you tell us about the jurisprudence here and what are the strengths and weaknesses of the challenge to the constitutionality of that provision?

MR. MOSS: I think that unlike the provisions that Dan spoke about, the soft money ban really is not to my mind terribly novel. If those of you who know the law in this area well, and excuse me for a minute, let me back up for a second for those who don't, to Buckley v. Valeo.

In Buckleythe courts drew a clear distinction for purposes of its analysis between limitations on contributions to candidates and limitations on expenditures. And for the most part, but not entirely, struck down the expenditure provisions and upheld the contribution limitations.

What the Court said was, it said that contribution limitations, and the soft money ban is a form of contribution limitations, contribution limitations do implicate free speech interests but that they only marginally restrict the contributor's ability to engage in free speech. That's because contributions in the Court's view involve speech in two ways. First, there's simply the symbolic act of giving and as to the symbolic act of giving and speaking by saying, "I care enough about your candidacy that I want to contribute money to it," the Court held that the quantity of the communication was not perceptively affected by the size of the contribution.

And with respect to the other piece, the second piece was the ability to facilitate the speech of someone else, and as to that the Court said well that's someone else who is speaking. So again the first amendment implications are not terribly strong there. What the Court held was that there would only be a problem under that prong of free speech analysis if the contribution limits were so severe so that they really interfered with or undermined the ability of the candidate to get across his or her message. And more recently in the Shrink Missouri case, the Court said that the test is whether the limitation is so low that it would drive the candidate's voice below the level of notice.

So that's the general approach that the Court takes in thinking about contribution limits.

In Buckleythe Court held that the governmental purpose of preventing corruption and the appearance of corruption were sufficient to justify contribution limits. That, as the Court has made clear in subsequent cases, is not an anti-bribery standard. The Court again in Shrink Missouri said the question is really whether there is a perception that as a result of the contributions that politicians will be seen as too compliant with the wishes of their large contributors.

The Court did not really get into the question of whether there were other justifications that would sustain contribution limits in Valeo because it didn't have to but others have certainly since then thought about additional justifications such as the effects of large contributions and the perception of influence on voter participation, on decisions of individuals to seek election or to seek reelection. And most recently the question of whether the soft money loophole itself undermines confidence in government because it generates a perception in the public that our elected officials are involved in a massive game of evasion.

Soft money contributions, as most people in this room know, have just skyrocketed. In 1988 soft money contributions to national parties were only $45 million. In '92 they rose to $84 million. In '96 they rose to $235 million. And in the 2000 election cycle they rose to roughly $463 million.

So the question for the Court to wrestle with when it gets the case will be does this money under the framework that is established in Valeo give rise to an appearance of corruption? Are elected officials seen as too compliant with the wishes of those who are donating the funds?

And as to that I think the answer is pretty clear. In fact I think the Supreme Court has certainly strongly hinted at the answer less than a year ago in its decision in Colorado Republicans II where the Court said that political parties act as agents for spending on behalf of those who seek to produce obligated officeholders, and in a footnote quoted Senator Paul Simon saying "I believe people contribute to political committees on both sides of the aisle because they want favors. There is an expectation that giving to party committees helps you legislatively."

And the Thompson Committee report certainly goes through and chronicles enormous amounts of either actual corruption or an appearance of corruption from soft money.

That brings us to the question of what are arguments we're likely to see if and when the soft money provisions are challenged. I think it's possible that some might argue that Buckley v. Valeo was just wrong in this structure that I set out and was wrong integrating contributions in this fashion and seek the overruling of Buckley. Justice Thomas has certainly in a number of opinions urged the overruling of Buckleyalthough I think that he certainly seems to be in the minority on the Supreme Court in that view.

I think it extremely unlikely that the Court would overrule that aspect of Buckley. The decision is over 25 years old. The Court applied the rule a couple of years ago directly on point in Shrink Missouri. Just this past year the Court actually really extended the analysis of the contribution limits in the Colorado Republicans II decision where the Court upheld limitations on coordinated expenditures, saying that coordinated expenditures really were and should be thought of as contributions. And because they should be thought of as contributions, they could be upheld.

And I also think that just on the merits that in fact Buckley was right in thinking about contributions in this way. One thing that was pointed out I believe in the Colorado Republicans II case is that frequently, just as an example, political action committees will contribute to candidates on both sides of an election. I think that highlights the somewhat diminished speech value of political contributions.

The second argument that we have seen made and that may be made in litigation is that the soft money ban really is now accepting the Buckley framework, really is an expenditure of limitations and the purpose and effect of the provision is to prevent issue advocacy, is to deny the political parties money that they need in order to engage in issue advocacy. But I think that that is simply wrong. The purpose of the provision is in fact to prevent the appearance of corruption that comes with this massive inflow of money to political parties and the effect of the provision is not to preclude political parties from engaging in any activity that they could otherwise lawfully engage in. They just have to raise the money from more individuals and in smaller increments, and under the new law they will be able to raise hard money contributions of $2,000 per individual.

And finally I think the argument just simply, I don't think it proves too much because I think everything that is said by that argument could be said about the contribution limits that were at issue in Buckley. In fact in Buckley the Court did reject one rationale and said that equalization of speech is not an appropriate basis for contribution or expenditure limits. And the Court in Buckley didn't turn around and say when it got to contribution limits, oh, these may have the effect of equalizing because the contribution limits in fact were fully justified by the anti-corruption rationale.

I think the final argument that I'll mention is that one could argue that, and I think we're likely to hear, that contributions to political parties don't raise the same specter of corruption or the appearance of corruption that was raised by the contributions that were at issue in Buckley v. Valeo. There is a middle man involved, in essence. But here again I think the fact that there is a middle man involved based on simply picking up the newspaper and reading what public perception is about soft money contributions I think doesn't do it. It may be that the appearance of corruption is at the wholesale rather than at the retail level. But the appearance I think unavoidably remains.

Senator Dole back in 1996 candidly described one of the soft money ads that was run in his election and he said, "It never says I'm running for President, even though I hope it's fairly obvious since I'm the only one in the pictures." And the Thompson Committee found the existence of shadow reelection campaigns and the minority report to the Thompson Committee concluded that the parties raised soft money by offering access to party leaders and elected officials.

I think the appearance of corruption is quite strong with soft money and I just don't think that argument works.

As a final thing I'll say about that argument and the arguments I think we're likely to see is that the Supreme Court has made clear that it's permissible to limit contributions to avoid evasion of other contribution limits and that essentially is what the soft money ban is about. It's about that sort of evasion.

In Buckley v. Valeo the Court upheld an aggregate cap on individual contributions of $25,000 per person, and the Court said it recognized that as a result of that there may be some individuals out there who could not contribute to all the officials running for office who they would like to contribute to, but the Court said that even though it would limit speech in that fashion that the limit was necessary to avoid the evasion of people giving huge donations to political parties with the understanding or hope that even if not earmarked that the money in fact would benefit the candidates they were supporting.

MR. MANN: Thank you Randy.

There's one other provision and maybe we'll pick up on this later that I think those arguing that the ban is unconstitutional will make and that goes to almost a form of equal protection. It's an argument that the associational rights of political parties are being discriminated against relative to other groups. That other groups are able to raise "unregulated, non-federal money" and spend it for purposes like issue advocacy and involvement in state and local elections that under this legislation the national political parties would have to raise and spend hard money or regulated money, and that asymmetry creates a problematic.

Now I think the response to that would be that parties are different than other organizations. That they exist to win elections. And national parties exist primarily to win federal elections and therefore the argument doesn't hold, but I think it will almost certainly be raised by the plaintiffs. Would you agree with that?

MR. MOSS: I've certainly seen the argument and I think it's likely to be raised. In addition to what you've said I guess I would add that I don't know why one couldn't say the same thing about the contribution limits that were at issue in Buckley. You had someone who was actually holding themselves out there running for office and they are limited in the contributions that they can raise which in some sense arguably puts them at the disadvantage of responding to those who may be attacking them.

I think the Court didn't see it as a problem there and I don't think they will see it as a problem here as well.

MR. MANN: Let's turn to Trevor. Are there particular parts of this legislation that you see as posing unusually interesting constitutional questions?

MR. POTTER: I think one of the interesting things this conversation illustrates is that there has been an article of faith out there for awhile by the opponents of campaign finance reform and it has gone, "well, even if it gets through Congress, even if it's signed by the President, it's all unconstitutional anyway." And you see, I think an interesting development in the Wall Street Journal editorial which is urging President Bush to veto this saying, "it's clearly unconstitutional, you have an oath of office to defend the Constitution," I don't think you would see that level of stridency if they actually were comfortable that it were unconstitutional and it as going to be thrown out by the Supreme Court. Instead, as Dan and Randy have indicated, this has been very carefully thought out. And I think what's dawning on the opponents of reform is that much of this has clear constitutional sailing and that I think is changing the current debate and making things a little more frantic now.

In terms of the question you asked, is there anything here that's going to be particularly complicated. There are some issues we haven't discussed which will be reviewed by the courts. There are a number of provisions that were put in the bill as it went through the Senate and the House. One of them, for instance is the provision known as the Millionaire's Provision that says essentially that we want to enable a candidate to get sufficient funding if their opponent is spending an unlimited amount of their own money. Under Buckley an individual cannot be limited as to what he or she can spend on their own campaign, so the argument was made in the Floor of the House and the Senate by a number of people who fear a free spending individual running against them, well if that's happening and I can't prevent them from spending an unlimited amount of money, Senator Corzine's, what was it, $70 million? $63? Then what am I going to do about that?

The answer was well if you have somebody who's spending an unlimited amount of money against you then we will allow you to raise more. We will allow individuals to give more than they normally could to you campaign to try to get you some resources, more resources to respond to that. And that will be I think one of the issues that will be hard fought.

Interestingly this goes to the point Randy made which is a lot of this is going to depend on the legal doctrine of standing. Who can challenge that? Well logically the person who can challenge it is a millionaire candidate who thinks that discriminates against his ability to spend his own money. Whether they can find a millionaire candidate off the bat who is willing to go and litigate that, we'll have to see.

So some of these issues may not even be resolved in the first round of litigation, but if you get there that dispute is going to be on the one hand somebody saying, "it discriminates against me because it effectively penalizes me for spending my own money." And the response is going to be, "no, you can still spend as much as you want. What it enables is the other candidate a shot at responding."

So you're going to see issues like that.

MR. MANN: But Trevor, might it also pose a more fundamental challenge to the whole logic of Buckley and the corruption or the appearance of corruption? Does it disappear in the face of a free spending challenger therefore allowing those contribution limits to be raised?

MR. POTTER: I think the argument that clearly will be made there is that Congress would prefer to have the lower limits and they think that's the safest in terms of preventing corruption. However, in an instance where otherwise you're effectively not going to have a race and one person will drown out the other, that democracy is better served by allowing these higher contribution limits in these isolated instances and these occasional ones. It's not going to be the preferred contribution limit, but it will be the one that Congress will adopt in order to at least have a democratic election. But that will be an issue as well.

MR. MANN: You wanted to say something about that before Trevor returns to these other items.

MR. ORNSTEIN: I have a larger point to make about the court case which is just this. There are really two points here.

As this comes to the courts there are two things to keep in mind. The first is the last time Congress spoke on campaign finance reform was 1974. Then the Court intervened in 1976. We've had a whole slew of decisions, some by the Supreme Court, lots by lower courts, that are really based on that set of facts.

Now Congress has acted again. One of the real questions here is how much deference will the Court give to Congress as it acts? We know that in the Massachusetts Citizens for Life, Chief Justice Rehnquist said, "we are obliged to leave the drawing of lines such as this to Congress," adding of course, if those lines are within constitutional bounds. But they presumably are going to start with some deference to Congress.

And as Senator McConnell took to the Floor repeatedly to argue against the constitutionality here, he referred over and over again to a set of lower court decisions. I think probably all of us, had we been on lower courts, would have ended up deciding in the same way the lower courts did because what we had to go on was Congress acting, the Court intervening, and then Congress not acting since, implicitly saying the Court was right.

The second point here is this debate in the Senate was conducted with a very clear and sensitive eye to facts on the ground. What we have had since Buckley is an enormous amount of impeccable social science research done especially in the last couple of election cycles, looking at what these communications actually are. They were referenced during the debate. And it is clear that Congress didn't just act willy-nilly. They looked very carefully at what is the state of express advocacy? What is the state of electioneering communications, and how do those play out?

So in the Buckley decision where the definition of express advocacy in a footnote was, "well, it's communications." Just to give some examples it used words like "vote for", "vote against", "elect", "defeat". We now know that only the tiniest proportion of candidate ads, which are the essence of express advocacy, use such words.

So here it seems to me one of the major arguments is give deference to a Congress that isn't just acting in an emotional fashion or without regards to facts, but is looking at the state of play on the ground since Buckley, using the structure of Buckley and making a change, and that may make a more compelling case. At least it will for some justices.

MR. MOSS: And I would just add to that, if one can ever imagine a circumstance in which deference to fact finding by the Congress is appropriate, one would think this would be the case. Because in fact you have 535 experts out there on how campaign finance works on the ground.

MR. POTTER: And you also have, as Norm has indicated, you've had 25 years post-Buckley of experience to know which assumptions made by the Court in Buckley have not proved correct in practice. So I think the important Norman is making is very important. When Congress comes back and says, based on our practical experience over the last 25 years, we are going to draw a clear, narrow line here. We are not going to be vague as we were in Buckley and got thrown out. Instead we're going to be precise in defining electioneering communications.

I think the Court is going to look at that and give it some deference because of the practical history involved.

MR. MANN: Trevor, the other items that you were starting on, the Millionaire's Amendment and suggesting there may be some others with a particular problem. And this gets us then to the 501(c)3s, (c)4s, the Wellstone Amendment, the MCFL. What should we make about that in the context of a constitutional strategy that Dan outlined?

MR. POTTER: I want to be clear. I don't think there's a problem with the Millionaire's Amendment. What I think is that it's going to be like much of this Act, challenged by people and you're going to have a constitutional debate, a statutory debate about what it means, how it's interpreted.

The most complicated area of this act is the one that involves speech by non-profit corporations. As Dan indicated in walking through it, I think it's highly defensible here given the Supreme Court's decision in Austin which reaffirmed the ability of Congress to regulate, the state to regulate and prohibit corporate political expenditures. It's defensible to define advertising featuring federal candidates in certain periods before the election, paid for by corporations and labor unions, as an electioneering communication that may only occur with individual funds and not with corporate or labor funding.

The subset of that is well what happens if you have incorporated entities that are themselves not funded with for-profit corporate funds? What I'm going to do is suggest that the audience afterwards and the viewers at home take a look at very detailed descriptions of these provisions that have been put up on the web. Through the Brookings website you can get to the Campaign Finance Institute which has done a couple of page description of how this plays out. But in summary what we're looking at is a series of alternative or overlapping provisions. Dan outlined the way the Act is originally drafted. You thereafter have an amendment by Senator Wellstone that removes part of that exemption. Both are in the Act. What that means is if the Wellstone provision is upheld, it is the law. If the Wellstone provision is not upheld then it reverts to the earlier provision in the Act.

The view certainly of the supporters of this is that in any case there are certain core constitutional cases that this act does not purport to overturn and couldn't overturn. One of them is the Supreme Court's MCFL decision which says that certain small non-profit incorporated organizations that don't have corporate and labor funds in their treasuries can engage in political speech, even though they're incorporated. And I think a good reading of that is that that Supreme Court protection for certain small non-profits remains because they are already exempted from the definition of 441(b) corporations and therefore aren't governed by this legislation. But that's the sort of technical passing that will be undoubtedly the subject of briefs in the Supreme Court as we get there.

MR. MANN: In a practical sense did the Wellstone Amendment close what would otherwise have been a "major loophole" in the legislation? That is do we anticipate a class of organizations, associated with a large group of political actors funneling resources in ways that would defeat the intention of the framers?

MR. POTTER: I think the basic distinction here is going to be between corporate labor money, which is regulated and prohibited in these certain periods before an election, and individual money. And thus I think it's really a false issue because corporations and labor unions under any reading of this, whether it's the Wellstone or the MCFL or without the Wellstone, can't spend their money on these ads whether they do it through some non-profit or not.

Individuals can do it. They can do it directly. So there's no particular advantage to going through a non-profit. They can on their own do it. That's allowed by this act. It's constitutionally protected by Buckley.

So I think it's more of an attempt to complicate life than, as you suggest, something that's going to have a real effect on elections down the road.

MR. MANN: It really gets us into our third topic because you're really wondering what happens in the real world of politics. It turns out political parties are now the major sponsors of issue ads that would be affected by this legislation. They would be caught in both ways. That is no longer having soft money and also having to follow the rules as enunciated.

My understanding of Buckley is that the Court actually treated political parties like candidates and never anticipated that the issue advocacy, express advocacy distinction was relevant to them. That parties by their very nature engage in express advocacy just like candidates do. But this legislation would affirm that.

MR. POTTER: We didn't have soft money in Buckley. What we had was contributions to political parties. Whatever they choose spend it for. And those contributions could be limited to prevent corruption. If that's what we go back to, political parties can engage in spending all through this period. They're not restricted in the timing or anything else. They're just using the contributions that they have permissibly raised in terms of the limits on what individuals can give to those parties and the prohibitions which have been around since 1907 on corporations giving to parties.

MR. MANN: I'd like to entertain questions from the audience on the constitutional— First question is right here, please. On the aisle. Thank you. Would you identify yourself.

Q: I'm Mortimer Caplin of Caplin & Drysdale.

I was wondering how code section, Internal Revenue Code Section 527 dealing with PACs fit into the picture. Does that open up other routes?

MR. POTTER: A great question from a former IRS Commissioner. (Laughter)

The question dealt with the section of the Internal Revenue Code, Section 527, which defines a political organization.

This is something that actually Congress dealt with two years ago. There have been a couple of places where Congress has stepped into the election law area since Buckley. This is one of them. What Congress said essentially is if you choose to qualify as a political organization you get certain tax benefits, you're tax exempt. In those circumstances you have to disclose your donors. So there is as a matter of current law a provision requiring disclosure of activity by 527s.

They're only covered by the provisions of this law, otherwise if those 527s are incorporated because then they get into this provision for corporate communications. If they're not incorporated and they're not using corporate funds, then they could go ahead and do their activities. They would disclose under the current law that we have.

Tom, I would add, it does raise something that you're reading a lot about in Washington and if the Act passes you will read about which is how are people going to get around this? And one of the suggestions is that perhaps people would use other types of organizations or unincorporated associations. I think, actually a quote on that would be, I had a call from an attorney recently, and she said I've been looking at this and I'm disturbed because the press keeps thinking there are easy ways around this. My clients call me and say so how am I going to do all this spending that I used to do? And she said, the truth is I don't know how they're going to do it. This is pretty well written, she said, and there are not easy ways around it.

But I think you're going to see a lot of discussion of are there some ways to do it at least in terms of avoiding disclosure.

MR. MANN: We will pursue this point more generally. On the one hand there are those wise political consultants in Washington who are saying ah, no problem, we'll just move the money here, we'll send it here, it will be less accountable but it won't be any different.

On the other hand you begin looking at the particular provisions of the law and you realize gee, those who formulated it actually anticipated some of these possibilities. They expect some of this money, say soft money, to move elsewhere, to be retained, to be used in other ways. Certainly they expect adaptations. Bundling will become more important, if not formally like Emily's list, informally.

Yes, there will be consequences, but many of them I think you will see have been anticipated. Next question, right here.

Q: Dan Manatt with the Campaign Finance Institute.

A question about Supreme Court practical politics of this. I'm wondering if Dan or Randy or any of the panel see any trend in the, I guess there have been three or four campaign finance cases and of course there have been some other election law and political law cases, the two Colorado decisions, Shrink PAC, and so forth. They tend to be 5-4 decisions, some of them 6-3. We've seen for instance the Chief Justice, I believe he was the only sitting member of the Court who served in the Buckley panel. He tends to be more status quo or pro Federal Election Campaign Act than Scalia and the others.

So I'm wondering just sort of a general take on sort of the chamber politics of how this will play out in the high court.

MR. ORTIZ: You're counting noses, is what you really want.

The clear trend has been towards polarization on the Court over these kinds of issues over the last few years. On the one hand you have a pretty well defined camp of three?Justice Thomas who has more recently been joined by Justices Scalia and Kennedy suggesting that well, it might really be time to overrule Buckley v. Valeo and when it falls it should fall in the direction against regulation. Remember Buckley made this distinction between treatment of contributions on the one hand and treatment of expenditures on the other. Expenditure limitations are presumptively invalid whereas contribution limitations might be permissible under the Constitution depending upon the governmental interest.

Basically that group of three justices it appears is tempted to treat contributions the same as expenditures which means very hard to have any regime of regulation at least beyond disclosure.

On the other hand, specially in Shrink Missouri you see another group of justices developing. Justices Breyer, Ginsburg and Stevens who suggested that well maybe it's time to re-analyze Buckley. They haven't actually called for overruling it, but maybe we should look at it again and if it poses a problem that seems like soft money regulation or reasonable soft money regulation, Justices Breyer and Ginsburg have said well at that point maybe we should overrule it and start again. But suggesting that if Buckley falls it should fall in the other direction and the Congress should have the authority to regulate expenditures much more like the authority it has now under Buckley to regulate contributions.

That leaves O'Connor, Souter and Rehnquist. Souter and O'Connor often in the middle, especially O'Connor.

The interesting thing about this issue with respect to this legislation is that Rehnquist not only has been someone described as status quo so he's not too uncomfortable with Buckley. That has always, I think, fairly strongly seen the distinction between the treatment of corporate and union spending on the one hand and individual spending on the other as incredibly important. Witness his vote in Austin v. Michigan State Chamber of Commerce. So at least on that part of the legislation I'm fairly hopeful that it's consistent with the approach he has laid out.

But again, this legislation is a package of very different kinds of things. It's not as if you can just count up noses in the abstract. You've got to look at it issue by issue by issue by issue, and this is an area where at least two-thirds of the members of the Court suggested that well maybe we need to go back to first principles and start from scratch. So there's a lot more uncertainty here than there usually is.

This legislation was designed against a background of Buckley, against the empirical background, just a background of common sense. You hope that will take you a large part of the way.

MR. MANN: Anyone want to add to that?

I keep wondering what a single Court replacement might mean in this case, but we shall see. Yes, all the way in the back.

Q: Jeff Johnson with CNSNews.com.

About the issue advocacy, and I guess this is for Professor Ortiz. The issue advocacy groups say that the 60 and 30 day restrictions take them out of the loop during the most important time to communicate with voters, and as far as the exceptions which allow them to do the communication if they disclose their contributors, they argue that that is saying that you can exercise your free speech rights but only after you register with the government.

MR. ORTIZ: Well, disclosure is going to be getting information out there that some groups might not prefer to have out there. That's true. But the Supreme Court has always said that the voters' and the government's interest in disclosure is strong enough to often warrant that kind of information being made available to the public.

Also many of those groups seem to overlook many of the broad exclusions to electioneering communications. So remember I said the who, the what, the when and the how? It covers cable, broadcast, satellite. Well, they're using some other means of communication, no real impact at all.

You mentioned the when, it certainly covers that. The what. The question is, do you really have to clearly identify candidates to get your position across on the merits of a particular piece of legislation that you have one position on or another. And also the who, so the targeting provisions work to restrict.

No question that it's going to require more disclosure than the existing regime and it's also going to prevent the use of money that comes from business corporations and unions being funneled through non-profits as has been permissible in the past. No question about that.

But given the sort of framework, the sort of background on what the Supreme Court has decided here, I at least have pretty high hopes that they'll find that on the one hand, since it's mostly corporate spending that they're worried about as far as the prohibition goes, not too much of a problem. And that disclosure on the other hand really doesn't impose that much of a burden on them.

MR. POTTER: Again, this is an area that people perhaps overlook the Supreme Court jurisprudence on. What the Court has said in Buckley is that people who engage in political speech do have to disclose their identities. If you contribute under current law, you disclose who you are. If you make an independent expenditure you are currently required to report that and it is a matter of public record. So all this does is move the line of what spending is disclosed. It doesn't change the constitutional doctrine that says you can require disclosure of political speech.

Having said that there's a case that Dan has talked about twice, and I think it's important to recognize that this is symptomatic of what's out there. There is already settled constitutional doctrine. The case is something called Socialist Workers, and in that what the Supreme Court said is that there are some limits to disclosure. One of those, the limit they were talking about in Socialist Workers is, if you can show that disclosing your contributors will actually injure your contributors—that they will lose their job, that you are an unpopular group and that therefore the effect of disclosing your contributors has a much greater adverse effect on yours that disclosing the contributors to some less controversial group, then the Supreme Court said you can be exempt from those disclosure requirements, and the FEC actually has regulations on a group being able to apply for an exemption and not have to disclose its contributors.

So I think current law has already deal with a lot of that in ways that will prove useful for this Act as well.

MR. ORNSTEIN: There's been an enormous amount of hyperbole and distortion on this, some of which I have to say has been advanced by a lot of the press accounts which have used an unfortunate shorthand along the way of saying that this legislation would ban ads before the election. Well that's the equivalent of saying that currently candidates are banned from attacking their opponents before an election because they're limited in the sources of funds that they can use.

This legislation limits the funds that can be used by groups for these kinds of communications. It doesn't stop them from communicating or take them out of the game 30 to 60 days before an election. It means that they can't use union dues or corporate funds for the ads, and that they have to disclose. Just as candidates can't use union dues or corporate funds and have to disclose and have some limits to what the individual contributions are.

So you see magazine covers with people having gags across their mouths and you see everybody including a lot of the reporters who covered this using the shorthand, and the debate for public opinion on this may in fact even influence the Court, so I think it's really important to make that clear.

MR. POTTER: One way of looking at this is to say that if this becomes law what we're doing is not revolutionizing the system but we're going back to a place we were. Tom suggested 1996, I'd suggest maybe the mid 1980s before we really had soft money. You still had a lot of political speech. You had political speech by issue groups. But if they mentioned a candidate they did so through their political committees, which were individual funds voluntarily raised and disclosed. They could still do it. And that is true under this act. Any of these groups could engage in full-fledged political speech in the 30-60 day period and all the rest, but using permissible funds which would mean through a political committee.

MR. MANN: And I'd just add one footnote to that, building on the empirical record that Norm referred to earlier. We now have research on the television advertising that was actually done in the 1998 and in 2000 elections, and we have discovered that this new McCain-Feingold/Shays-Meehan bright line test actually works. It isn't subject to over-breadth. That is it doesn't take into its net what is designed to be genuine issue advocacy. That it really is electioneering and therefore ought to be subject to the same kind of provisions that Norm and Trevor and Dan just suggested.

Q: Al Millikan, Washington Independent Writers.

If I'm understanding this correctly this limitation on cable, broadcast, satellite, and the 30-60 day limit, it just seems an obviously clear first amendment violation. It seems to me that the intent of those in Congress, it seems to me that these issue ads that come up and actually the negative ads that come up against them, they are disturbed because they cannot really control these and they can't stop the opposition from using that against them. But yet it seems crucial for our political process.

It seems to me that they've been so effective is the reason that this effort is being made to try to stop that.

MR. MANN: In fact if you look at the empirical record most of the ads have been run on their behalf by their political parties, fending off challengers. So I don't think it's quite the— Incumbent protection means that you suggest. And I don't think there's a clear first amendment argument. I mean the whole brunt of this is that there are debates here and differences, but there is a constitutional logic to the proponents here and it can't be dismissed by a rhetorical plea to the first amendment. It's going to have to be argued out and those who will challenge the constitutionality have a tough road ahead.

MR. POTTER: I think the reason there isn't a clear first amendment violation here is that we're talking about speech by corporations and labor unions which the Court has said may be regulated. And in Austin specifically dealing with corporate speech it says corporations may not engage in political speech, or the state may prevent them from doing so.

We're not talking about individual speech, which is protected. I think that's the distinction that this bill makes, and as Dan pointed out that's really why this is different than some of the earlier efforts at reform.

MR. MANN: We are running out of time. We're not going to be able to do full justice to some of the possible consequences of this legislation, but before ending I'd like to ask Norm to address the question of whether political parties and national political parties in particular will be harmed either because of the ban on soft money or because of the possibility that some so-called candidate-specific issue advocacy will still throw through the nets after the Court weighs in and parties will be at a particular disadvantage.

MR. ORNSTEIN: I think this is one of the myths that's been perpetrated about this legislation all along the way. Among the myths, of course, that this was a blunt meat-ax approach to the first amendment which I think, I hope for most of you we have dealt with effectively here. That all the money would still be there, it would just flow through other channels. That's not going to be the case. That this is an incumbent protection bill. If you look at incumbent reelection rates before the Buckley decision and then look at them in the last two and before soft money was created, we have seen incumbency reelection rates go up in the Senate dramatically, in the House they're bumping up against the ceiling but they're even higher, so that's not true.

And of course right at the top of the list is that this will dramatically hurt political parties. That is first based on the assumption that running advertising most of which, the overwhelming majority of which doesn't even mention a political party that the parties have run with their soft money is party building or strengthens political parties.

I think most of us who have ever taught courses in political parties would argue that this does nothing to strengthen a political party at its base. The rationale behind the Federal Election Commission creating a separate category of soft money was to build parties. The examples that they used were things like grass roots activities and get out the vote drives.

What's going to happen here is a very substantial share of money going to the parties that was in effect simply channeled right through into advertising will be gone and they will be forced back to use their resources and their wiles to get out the vote drives and grassroots activities.

Part I think of the reason that some Republicans have opposed this law is that they have not been very strong in those areas, and they will now be moved back to basics. And actually, interestingly, Democrats who have used soft money as a way to avoid building a strong base of donors both at the lower and at the upper levels and have relied on just a small handful of multi-millionaires for their funding, will now be forced to build those donor bases and actually probably build the parties themselves. And of course, state and local parties which are given an infusion of funds by the Levin Amendment, will be strengthened again in these areas.

So my judgment is while it will take a little bit of time for adjustment, that this will strengthen parties where they are supposed to be stronger. And while certainly some money is going to flow into advertising or probably flow into things like direct mail campaigns which are not affected by the Snowe-Jeffords portion of this bill, that that doesn't in any way undermine the role of the party working for its candidates and building from the bottom up which is what they're supposed to do.

MR. POTTER: My prediction is that the losers here are the handful of Washington congressional leaders who are raising large amounts of soft money and using it as a power base and are spending it through a handful of political consultants on advertising. The winners are in fact the parties at the state level because you will see more activity by state parties. There are specific provisions in this bill that encourage the get-out-the-vote, voter registration activity by state parties. So it isn't that the parties are going to be adversely affected. It is they're going to be strengthened at the state and local level and be less of simply a money pass-through from the lobbyists to the Congress to the national committee sent down to run the advertising—

MR. ORNSTEIN: The other loser here is probably the Mercedes Benz dealerships for which the consultants have been major, major customers. Because the political consultants who have been getting huge swaths of soft money both to run advertising, and they're cut off the top from the advertising, and to pay for polling, consulting and otherwise, the White House which gets all of its polling done is financed through soft money that is channeled through the political parties. These people will take a hit.

Part of the reason you see hysteria among many members of Congress is consultants have been whispering in their ears that this will kill us, and they're right. It will kill them, but not the parties.

MR. MANN: MR. MANN: I'd like those political consultants in the C-Span audience should send their fan mail to normorn@AEI.org.

A colleague, Tony Corrado has taken a look at the fundraising patterns of political parties and how they might adjust. It turns out parties in this last election cycle raised more in hard money than they had raised in hard and soft money any time prior to the '92 election.

If you look at the changes in the law, individuals can now give up to $57,500 to parties in a two year cycle and still have money left over to give to candidates so that parties now have an ability and incentive to raise hard money. Tony has calculated a substantial number of soft money contributors, individuals, could be converted into hard money contributors at a lower amount of money.

Mind you the opportunity for money flow here is still substantial. Some of our callers, e-mailers say but this bill raises the individual contribution limit from $1,000 to $2,000. That's a problematic.

Listen, the reality is this bill is trying to deal with the mega contributions through soft money and the kinds of conflicts of interest and near extortion that result as a consequence. Parties and candidates and other political actors are going to have ample scope for electioneering within the confines of this bill.

The one point we haven't talked about and I propose this for a subsequent session among us is the impact of all of these changes on the presidential system. Remember, we have a partially publicly financed nominating system and in theory a fully publicly financed general election system. The reality is very different. But these changes may encourage more and more candidates to opt out of the public system unless further changes in the law are made to increase spending limits in the primaries, to increase the amount of public funds available and the amounts matched, to increase what parties can do in coordinated spending in the general election period. It's an area deserving a lot of attention, but I think our general view is that the steps being taken are not momentous in the sense of being exhaustive in dealing with all the problems in the system. But if you don't start with these then you're never going to be able to tend to the other problems that clearly exist.

I'd like to thank AEI and the Campaign and Media Legal Center for joining Brookings in this briefing. I'd like to thank Dan Ortiz, Randy Moss, Trevor Potter, Norman Ornstein. I'd like to thank our audience, and we are adjourned.