13th annual Municipal Finance Conference


13th annual Municipal Finance Conference



With Genuine Reform Real Close to Reality, Vote Nay on Ney Bill

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

July 12, 2001

Genuine campaign finance reform is closer to reality than it has been in a quarter century. But the chance for failure is still real and may be growing as the bill hits the floor of the House of Representatives today.

The danger may come from invidious amendments. The first assault, though, is from the Republican alternative, authored by Rep. Bob Ney (Ohio), who serves as chairman of the House Administration Committee. Ney’s alternative has been endorsed by Rep. Albert Wynn (D-Md.), head of the Congressional Black Caucus’ campaign reform task force, and has been talked up favorably by other members of the black and Hispanic caucuses.

It is also gaining support among Republican freshmen who benefited from Sen. John McCain’s (R-Ariz.)campaigns in their districts, but face heavy pressure from reform opponents, such as House Majority Whip Tom DeLay (R-Texas). For wayward Democrats and wavering Republicans, a vote for Ney might sell as a vote for some reform.

To be sure, many cynical lawmakers are looking for a way to avoid harsh criticism for hypocrisy and anti-reformism, while ensuring that reform itself actually dies. But some of those looking seriously at the Ney alternative undoubtedly believe that it is reform, albeit in a more diluted form.

After all, it puts a cap on previously unlimited soft money ($75,000) and prevents national parties from running candidate-specific “issue ads” financed with soft dollars. Thus, they would argue, it is a compromise between the status quo and the Shays-Meehan bill that is the House version of McCain-Feingold reform.

They are wrong. The Ney version emerged just before Congress left for the July Fourth break. We have taken a close look at it. It is in no way, shape or form reform. Moreover, it provides no “safe haven” for Members who want to argue that they are for reform—just not the McCain-Feingold version.

Take the presumed $75,000 cap on soft money. Actually, the Ney bill allows individuals and groups to give this sum annually to each national party committee. Right now each party has three such committees, the Democratic and Republican national committees and the House and Senate campaign committees.

Thus, the real annual soft-money cap in the Ney bill for individuals is $225,000 per year or $450,000 per election cycle. This means $900,000 per year for a couple!

If the parties decide that is not enough, they can always form more national committees (how about the Southern Republican Senate Campaign Committee?). Similarly, for entities like corporations (many of which give to both parties), the limit would be $450,000 per year, $900,000 per cycle. That’s some cap.

However, that is not all. Along with the limit on soft-money contributions to national parties, the Ney bill claims to block the use of this money for so-called “issue ads” by preventing the national parties from using it for that purpose—instead, requiring them to use soft money for what it was originally intended for, i.e., party-building and grassroots activities.

The Ney bill leaves two gigantic loopholes, though. It puts no limits whatsoever on soft-money contributions to state parties, including the ability of presidents, House and Senate leaders, or other national party figures, federal candidates or officeholders to raise soft money.

In the past two election cycles, the vast majority of the hundreds of millions of dollars in party attack ads on federal candidates that masked as issue advocacy were financed by state parties. So Ney provides not even a small fig leaf to alter or curtail the current practices that have left the airwaves flooded with these attack ads.

The damage is just as great in the area of hard money. We have argued in the past that the elimination of soft money should be accompanied by significant increases in hard dollars, both in individual contributions to candidates and in overall donations to parties.

The Ney bill takes one step back from positive change by eliminating the McCain-Feingold plan to increase the limits on individual contributions to presidential, Senate and House candidates from $1,000 to $2,000.

This salutary change would not even make up for half the inflation since the $1,000 limit was implemented in 1976. But Ney moves sharply in the opposite direction for parties, creating a huge back door for swollen individual hard-money contributions to them.

Under current law individuals can give an overall maximum of $25,000 per year to candidates, parties and PACs, with a sublimit under that total of $20,000 to parties. Under Shays-Meehan, those numbers are raised to $37,500 and $25,000, respectively.

The Ney bill increases the individual limit on overall annual giving to candidates and committees from $25,000 to $37,500, but what individuals give in hard money to the parties is exempted from that total. Separate overall limits for individual contributions to candidates and parties is a good idea, but that is not what Ney does.

Instead, his legislation allows individuals to make $30,000 hard-money contributions to each of the national party committees. Thus, Ney would allow individuals to give during an election cycle $255,000 in hard money and $450,000 in soft money at the national level—a whopping $705,000 or $1, 410,000 per couple—all thoughtfully indexed for inflation. Some limit.

To call this “reform” defies any reasonable definition of the term. To call anybody who votes for the Ney alternative a reformer is to distort the term beyond recognition.

Thomas Mann is a W. Averell Harriman Senior Fellow in American Governance at the Brookings Institution. Norman Ornstein is resident scholar at the American Enterprise Institute and a Roll Call contributing writer.