Campaign Finance Critics Pushing Myths – Not Reality

No sooner had the House passed the Shays-Meehan campaign finance reform legislation than critics in Congress and in interest groups rushed to trash it. They were joined by cynical, world-weary journalists, who usually invoked the infamous Law of Unintended Consequences: The goals of campaign finance regulation will inevitably be overwhelmed by unanticipated effects, rendering it either ineffective or pernicious.

We believe that these critics of campaign finance reform have misread the historical record and underestimated the care recent reformers have taken to gauge the constitutionality of their proposals as well as to anticipate their consequences. In so doing, these critics defend an intolerable status quo by perpetuating a number of myths about money and politics and the McCain-Feingold/Shays-Meehan effort. It seems clear now that the bill will pass the Senate and be sent on to President Bush, that he will likely sign it and that the battleground will then shift to the courts. It is important, both for the record and the atmosphere that will greet the forthcoming changes in law and practice, to challenge the myths.

Myth No. 1: The bill is an exercise in futility; it is clearly unconstitutional and its major provisions will be thrown out by the Supreme Court.

Reality: Recent Supreme Court decisions upholding individual contribution limits and ceilings on party-coordinated spending make it very likely that a national party soft-money ban will also be upheld. If corruption or the appearance of corruption is sufficient to justify $1,000 contribution limits to candidates, then surely it will support a ban on million-dollar contributions to party organizations that are the instruments of incumbent politicians.

As for issue advocacy, the language in the bill requiring that candidate-specific, targeted ads running close to an election and funded directly or indirectly by corporations or unions be financed with hard money takes its cue directly from the court’s reasoning in two important campaign finance cases: Austin and Massachusetts Citizens For Life. The provision is scrupulously grounded in the reasoning behind the landmark 1976 Buckley case, making a small adjustment in the “bright line” the court drew between “express advocacy” and “issue advocacy” based on a thorough empirical record—something not available at the time of the Buckley decision—that shows a radically different political world than existed in 1976. Chief Justice William Rehnquist said in MCFL, “We are obliged to leave the drawing of lines such as this to Congress if those lines are within constitutional bounds.” If he was serious, this careful, fact-based effort by Congress should pass muster with the Supreme Court.

Myth No. 2: Without soft money the national parties will atrophy.

Reality: The real myth is that soft money, which has been used largely to finance thinly disguised television attack ads that rarely even mention a political party, has strengthened parties at all. In fact, well before the Federal Election Commission invented soft money in 1978, the national parties were gaining strength. There is no reason they cannot adapt well to a return to a hard-money world. The national parties raised more than $700 million in hard money in the 2000 cycle, far more than both hard- and soft-money totals in any cycle before 1996. And, of course, Shays-Meehan does more than just abolish federal party soft money. The bill raises considerably the overall limits on what individual donors can give to parties and separates those limits from those for contributions to candidates. Parties will quickly discover how best to invest those added hard dollars within the new legal framework to advance their electoral interests. This will almost certainly entail some shift in emphasis from television attack ads to grassroots activities, which would actually strengthen parties.

Myth No. 3: Soft-money contributions from corporations, unions and wealthy individuals will not disappear; instead every dollar will flow to interest groups or be laundered through state and local parties.

Reality: No serious reformer believes that all soft-money contributions will dry up. Some will be diverted to alternative vehicles for political communication. But Shays-Meehan makes interest groups and state and local parties less than optimal alternatives. The money cannot finance the most potent electioneering, namely attack television ads close to the election. Moreover, the money cannot be laundered from one state to another or diverted into ads that target federal candidates. Absent the shakedown from national politicians that is a hallmark of the current system, much of the money is likely to remain in corporate and union coffers. Most important, the egregious conflicts of interest associated with megacontributions will be stemmed for the foreseeable future.

Myth No. 4: Citizens will be silenced and unable to criticize politicians close to an election.

Reality: Political speech is, of course, the most protected speech under the First Amendment. And no speakers are more significant than the candidates for office themselves. But the Supreme Court has regularly upheld the right of Congress to regulate the money contributed to candidates to finance their campaigns and their campaign communication. Current law doesn’t prevent candidates from running any ads, including those harshly critical of their opponents, within 60 days of an election or at any time. By placing corporations, unions and other groups under the same rules as candidates, Shays-Meehan no more silences citizens than current law silences candidates.

Myth No. 5: Shays-Meehan is an incumbent protection bill.

Reality: In the first two elections held after the current hard-money rules were put in place and before party soft money was created (1976 and 1978), the re-election rate for House incumbents was, respectively, 95.8 percent and 93.7 percent; for Senate incumbents it was 64 percent and 60 percent. In 1998 and 2000, under the current soft-money system, the reelection rate for House incumbents was 98.3 percent and 97.8 percent; for Senate incumbents, 89.7 percent and 78.6 percent. So much for challengers’ chances under the soft-money system!

In fact, by raising individual contribution limits and reducing the demand for TV time by parties and interest groups (which sharply bid up advertising time costs close to an election), Shays-Meehan will make it easier for challengers to raise money and make it less expensive for them to get their messages across.

Myth No. 6: If Shays-Meehan becomes law, campaign spending will not decline, fat cats will not disappear, bundlers will grow in importance, and new strategies of financing campaigns will be pursued.

Reality: Of course—and reformers will be neither surprised nor discouraged. The objective in this round of reform is basically to return to the status quo ante pre-1996, to repair the egregious tears in the regulatory fabric that have led to a cynical flouting of federal law and made impossible any other efforts to improve the campaign finance system.

This reform effort is not a panacea but a modest step, certain to redirect some money flows and confront candidates, parties and interest groups with new limits and opportunities. It is an absolutely essential one if we are to tolerably manage, not solve, the problem of money in politics.