Credibility for a Collapsed System

Norman J. Ornstein and
Ornstein headshot
Norman J. Ornstein Resident Scholar for Public Policy Research - American Enterprise Institute
Thomas E. Mann

December 16, 1996

The need for campaign finance reform, both to fix the problems that exploded this year and to deal with the long-term difficulties in the system, is urgent. But the tone of many erstwhile reformers has turned almost to despair.

David Broder, in his Dec. 1 op-ed column “Campaign Finance: No Easy Fixes,” laments a string of Supreme Court decisions—beginning with Buckley v. Valeo more than two decades ago and culminating in this year’s Colorado decision—that have enhanced the role of big money in the political process while making it all but impossible for reformers to correct it. The only way Broder sees to deal with the problem is through a constitutional amendment to the First Amendment that would try not to unduly limit the right of political expression—a course that is impractical and probably unwise.

But without the atomic bomb of a constitutional amendment, reformers see little to work with other than the usual menu of panaceas—from the traditional reformer’s golden oldie of voluntary spending limits and public financing to the hands-off conservatives’ approach of unlimited deregulation, using disclosure as the only check on the system.

In fact, however, new ideas out there can attract bipartisan support and meet constitutional muster as interpreted by the Supreme Court. Most important, they can help solve some of the serious problems with our campaign finance system.

The most immediate problems stem from three ominous developments this year. First, both parties engaged in an orgy of soft-money raising and spending that made a mockery of statutory limits on individual contributions and prohibitions on gifts from corporations and unions.

Second, parties and outside groups ran tens of thousands of political spots in 1996 that were financed by party “soft money,” union dues and corporate treasuries, almost all focused on negative attacks on candidates but crafted cleverly to qualify as “issue advocacy,” which is exempted from campaign limits.

Third, the Supreme Court’s Colorado decision affirming the right of political parties to make unlimited independent expenditures on behalf of their candidates moved the parties to set up shell operations “autonomous” from their own candidates and run huge campaigns of negative attacks on their opponents.

In each of these problem areas, candidates, parties and outside groups were skirting, even breaking, the law without any fear of significant penalty, because of weak or nonexistent enforcement of campaign laws.

These problems added a new layer to such chronic problems as candidates obsessed with raising money to run adequate campaigns, the incumbents’ advantage over challengers and the skewing of campaign funding toward big givers and away from small individual contributors.

What to do?

Here are five ideas that can form the basis of a bipartisan reform package in the 105th Congress. Combined, they counter the most blatant shortcomings of the present system in a fashion that is politically feasible and consistent with Supreme Court rulings:

Eliminate national party soft money. An easy way to do this is to create a single pot of party funds, all of which are subject to the contribution limitations in federal law. No nonfederal accounts, no contributions to the national parties from union dues or corporate treasuries, no solicitation of soft-money contributions by national party officials, staff or their agents for transfer to state parties.

At the same time, keep political parties vibrant by giving them more slack in raising hard money from individuals and more flexibility to contribute to or spend on behalf of their candidates (with exclusively hard-money funds), thereby rendering obsolete the preposterous and harmful Colorado decision.

Close the loophole on issue advocacy by narrowing its definition. All communications by groups that are clearly designed to influence federal elections should be covered by comparable restrictions, meaning, among other things that they cannot be financed by corporate or union funds but can use voluntary contributions in much the same way funds raised by political action committees are used. A carefully worded statute that defines campaign communications as those using any candidate’s name or likeness around the time of an election should meet the Supreme Court’s standards and would help end vicious personal attacks on candidates that are now exempt from campaign laws or rules.

Improve the quality of political discourse by creating a broadcast time bank. It would provide free TV and radio time both to parties (to be allocated among their candidates) and directly to candidates who qualify for it (those who raise substantial funds in small, individual, in-state contributions.). The free time would be contingent on the candidates themselves delivering the messages. One way to finance the bank would be to give broadcasters the right to charge market rates for political ads (they currently have to provide a deep discount) in return for their contributing time to the bank.

Create a 100 percent tax credit for in-state contributions to federal candidates of $100 or less, to be phased out if an individual gives more than $200 to the candidate. Increase the individual contribution limit from $1,000 to $2,500 to take into account two decades of inflation. And then finance the tax credit for small contributors by assessing campaigns a 10 percent fee for large contributions of $500 or more—having big donors, in effect, subsidize contributions by small ones.

Strengthen the enforcement of campaign laws by, among other things, requiring mandatory electronic filing with the FEC, guaranteeing adequate funding for the FEC, making disclosure more timely and fast-tracking investigations from the FEC to the Department of Justice if any significant evidence of criminal wrongdoing exists.

These proposals would not solve all the campaign finance problems, but they promise to alleviate some of the most egregious shortcomings and restoring a measure of credibility to a system that has collapsed. They break out of the old frameworks that divided parties and guaranteed no action. Neither ideologues on both sides nor the restrictions of the court have to stop constructive and meaningful reform.

Thomas E. Mann, director of governmental studies at the Brookings Institution, and Norman J. Ornstein at
the American Enterprise Institute, are co-editors of Campaign Finance Reform: A Sourcebook.