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Virtually all of this attention was negative, leading public interest groups, journalists, and some politicians to call for reforms ranging from a ban on party soft money to public funding of all federal elections to the provision of free broadcast time for congressional candidates. While some individuals and groups have repeatedly sought to whip up a public frenzy over campaign reform, some individuals in positions of power have taken more concrete steps toward changing the law. The courts have handed down rulings that have had significant impact on the conduct of federal elections. During the 105th Congress, a number of reform bills were introduced in the House and Senate that aimed to change the ways in which candidates finance and wage their congressional campaigns. Had these proposed changes been enacted, they would have had the potential to detract from or enhance the roles of parties in elections or to strengthen one party over the other. This is particularly the case of reforms that would have banned soft money without raising party contribution limits. Changes in the campaign finance system could have a significant impact on the quality of American democracy. In the following document we will explore in depth the controversy of campaign finance reform. POLITICAL PARTIES AND AMERICAN DEMOCRACY Political parties perform a number of functions that are vital to the political system. These include providing symbols for citizen identification and loyalty; socializing and educating voters; aggregating and articulating competing political interests; mobilizing electoral and governmental majorities and political opposition; institutionalizing and channeling societal conflict; helping to fashion, legitimate, and implement public policies; and fostering social and political stability. American political parties were organized primarily to elect candidates to public office. Unlike many of their counterparts in other democracies, American parties typically view public policy as a vehicle for the advancement of their electoral objectives, not vice-versa . Nevertheless, as in the New Deal era and during the "Republican Revolution" of 1995, the parties demonstrated that they can and do act to promote major policy change Under their electoral roles, parties bring some order to the confusion that often surrounds elections. The fact that each party stands for a general set of principles and goals helps to simplify the choices that voters make in elections. Even the most uninformed voters, who are completely ignorant of the candidates and issues involved in a particular election, can register their approval or disapproval of the state of the nation by casting their votes in support of or against the party that controls the government Under divided government, the party label helps these voters to place credit or blame on the party that controls Congress, the White House, the state legislature, or any other specific political institutions with which they are satisfied or displeased. Political scientists focus on the parties' abilities to carry out their electoral and other functions when appraising their vigor. Most people hold an opinion of political parties that contrasts markedly with the dominant view held by the general public. Whereas the public views parties with hostility or ambivalence, most scholars believe that parties are essential to democracy and are convinced that the strength of parties is a reflection of the overall health of our nation's politics THE ROLES OF POLITICAL PARTIES IN ELECTIONS One can best understand the contemporary roles of political parties in elections by looking at the historical record. Parties passed through at least two periods before emerging into their current form. During the first period, which extended from the post-Civil War era into the 1940s, political parties were the major organizers of elections. In most parts of the country, local party organizations, often referred to as old-fashioned political machines, recruited and selected candidates for public office and carried out their candidates' campaigns. Parties, not candidate organizations or political consultants, managed the campaigns, raised the funds that were spent in them, assessed the public mood, communicated with voters, and mobilized the electorate. Local party organizations were able to dominate the electoral process because they had the power to dispense nominations, possessed a virtual monopoly over the tools of campaigning, and provided the symbolic cues that informed and activated most voters The golden age of political parties ended because of several events and trends. Early in the twentieth century, the direct primary deprived party leaders of the opportunity to handpick candidates. Primaries also made it necessary for most candidates to assemble campaign organizations that were independent of party committees in order to win their party's nomination. Civil service reforms prevented local party bosses from distributing government jobs and contracts to party activists. Campaign finance legislation limited the amounts of money that parties could raise and contribute to campaigns. Broader cultural transformations, including declining immigration, the erosion of tightly knit ethnic communities, suburbanization, the widening of educational opportunities, and the introduction of the modern mass media encouraged voters to rely less on local party leaders and more on national sources for their political information and voting cues. Modern polling and marketing techniques and the emergence of a corps of professional political consultants made it possible for candidates to appeal directly to this more independent electorate. Collectively, these changes ushered in an era of candidate-centered elections. Political parties were initially unable to make the transition to the candidate-centered system, and most party committees sat on the sidelines of congressional elections from the 1940s through the early 1980s. Congressional candidates became largely self-starters rather than party recruits. They waged campaigns almost entirely through their own organizations. They received little financial, strategic, or technical help from party committees, turning instead to political action committees (PACs) and individuals for money and to professional consultants for political expertise. Some local party organizations continued to play a significant role in voter mobilization, but many candidates also relied on their own volunteers to carry out grassroots campaign activities. The contemporary era of party politics, marked by the partial adaptation of party organizations to the candidate-centered system, began around the mid-1980s. Most of this change took place at the national level, as the parties' national, congressional, and senatorial campaign committees began to assemble some of the financial, technical, and organizational resources needed to play a role in modern campaigns. Some state party organizations also adapted to the requirements of contemporary campaign. The importance of parties in the contemporary campaign environment depends not on their ability to dominate elections, but rather on their ability to help candidates and their organizations wage campaigns. The parties' national, congressional and state campaign committees can each make $5,000 in direct contributions to each general election candidate for the House. Parties also can make coordinated expenditures on behalf of candidates. These frequently take the form of polls, television ads, fund-raising assistance, issue research, and other campaign services over which both the parties and the candidates exercise some control. Originally set at $10,000 for all national party organizations and an additional $10,000 for state party committees, the limits are adjusted for inflation and reached $30,910 for each during the 1996 House elections. Party orgzanizations contributed roughly $4.2 million in direct contributions and $15.0 million in coordinated expenditures to House candidates in 1996. These contributions and coordinated expenditures, which are commonly referred to as "hard money," exclude "soft money" expenditures on voter mobilization efforts, generic television and radio advertisements, and other campaign activities intended to help federal and nonfederal candidates for office. Party hard money comprises approximately 6 percent of all of the resources assembled by a typical general election candidate for the House. More importantly, this money accounts for roughly 10 percent of the resources raised by House challengers and 7 percent of the money raised by House candidates whose races were decided by margins of 20 percent or less. National party organizations can contribute a total of $17,500 to each general election candidate for the Senate, and state party committees can contribute an additional $5,000. Party coordinated expenditure limits in Senate elections are determined by state population and adjusted for inflation. During the 1996 elections, the coordinated expenditure limits for national party organizations ranged from $61,820 in the smallest states to $823,690 in Texas. If an election had been held in 1996 in California--the nation's most populous state--the coordinated expenditure limit would have been set at $1,409,249. The coordinted expenditure limit for state parties is the equivalent of the national party limit, doubling the amount that parties can spend in coordinated expenditures. Political party committees contributed roughly $1.7 million to Senate candidates and spent almost $20.1 million in coordinated expenditures on their behalf in 1996. This $21.8 million total is substantially less than the $35.6 million in hard money that the parties spent in the 1994 Senate races. The recent record for party hard money spending in a Senate election was set in 1994 in California, where the Democratic party provided more than $2.6 million to the campaign of Senator Dianne Feinstein--just over 16 percent of the money she spent against her opponent, former Republican Rep. Michael Huffington. Parties allocate a greater share of their resources to House and Senate challengers than do any other group. In 1996, the Democrats and Republicans distributed 53 percent and 32 percent, respectively, of their contributions and coordinated expenditures to House challengers in contested races. The Democrats contributed more to challengers because they were pursuing an offensive strategy, designed to defeat Republican incumbents, whereas the Republicans focused on protecting their marginal incumbents, many of whom were first-term members. The figures for Senate elections show similar but somewhat weaker patterns. In 1996, the Democrats distributed 28 percent of their contributions and coordinated expenditures to Senate challengers, whereas the Republicans contributed 20 percent . Labor PACs came next, allocating 17 percent of their funds to challengers--all Democrats--followed by non-connected PACs, which donated 13 percent of their funds to challengers of both parties. Corporate and trade association PACs were tied, each contributing about 10 percent of their campaign dollars to challengers. Party organizations, especially the congressional and senatorial campaign committees, also assist candidates involved in close races (and some others) by providing them with services in campaign management, fund raising, issue and opposition research, advertising, and other aspects of campaigning that require technical expertise or in-depth research. These organizations also help selected candidates obtain money and other resources from PACs, political consultants, and congressional incumbents. It is difficult to assign a dollar value to most party services. However, two surveys of House and Senate candidates and campaign aides who competed in the 1984 and 1992 elections demonstrate that candidates in close contests, particularly House challenger and open-seat contestants, regard the congressional campaign committees as an important source of election assistance. With few exceptions, the congressional campaign committees are more helpful to candidates than are state and local parties, PACs, and other interest groups. PACs were somewhat more helpful than the congressional campaign committees in fund raising in 1992 but not in 1984. State and local parties were more important than the congressional campaign committees in grassroots activities both years By acting as appendages and accessories to the campaign organizations fielded by congressional candidates and by working as intermediaries between candidate organizations, political consultants, and PACs, the congressional and senatorial campaign committees have become important players in elections. Their role in House challenger campaigns is particularly noteworthy because few PACs or individuals are apt to make large contributions to these candidates. The promise of party contributions, coordinated expenditures, and other forms of assistance can influence a potential challenger's decision to run for Congress. The parties' national, congressional, and senatorial campaign committees also have come to play a bigger role in elections through their fund raising, party-building, voter mobilization programs, and advertising campaigns. National party money, including "soft money" raised outside the boundaries of the Federal Election Campaign Act of 1974 and its amendments (collectively referred to as FECA), has helped revitalize state and local party organizations and fund their voter mobilization activities. These activities are important because parties are more inclined than are candidates to register and mobilize new voters. National party money also pays for generic, party-focused election advertisements and issue-oriented public relations campaigns that give the parties greater visibility among voters During the 1996 elections, the parties used soft money to expand their communications activities to include substantial expenditures on issue advocacy advertisements and independent expenditures. The design of issue advocacy ads is to encourage citizens to support or oppose public policies or candidates. They differ from candidate advertisements in that they cannot expressly call for the election or defeat of individual candidates and do not qualify for the lowest unit rate charges when aired on television or radio. Party issue advocacy ads differ from party coordinated expenditures in that the issue ads are financed by a combination of hard money and soft money. The Democratic national, congressional, and senatorial campaign committees spent approximately $60.9 million on issue advocacy ads in 1996 elections. Their Republican counterparts spent about $49 million in those contests Party independent expenditures, like those made by PACs, can expressly call for the election or defeat of specific candidates. Parties must make these expenditures without the knowledge or consent of individual candidates and must finance them solely with hard money. Like issue advocacy ads, independent expenditures do not qualify for lowest unit rate charges. In 1996, Republican Party committees spent almost $10 million on independent expenditures, whereas Democratic committees spent slightly more than $1.3 million. The current campaign finance system gives incumbents overwhelming fund-raising advantages and discourages highly qualified challengers from running for Congress. It makes it difficult for virtually all nonincumbents, with the exception of millionaires, to wage effective campaigns. Political parties commit a greater portion of their resources to helping challengers than do PACs and individual contributors. Legislation that enables political parties to assume larger roles in elections could improve the quality of challengers who run for Congress and lead to more competitive elections. Legislation that converts unlimited and under-disclosed soft money contributions and expenditures into hard money transactions, which are subject to limits and full disclosure, would enhance the legitimacy of party activity in elections. These changes would improve political accountability and representation and help reinvigorate American democracy. The Supreme Court has recognized the danger that campaign finance regulation poses to freedom of speech, and for the past 20 years, beginning with Buckley v. Valeo, has struck down many proposed restrictions on political spending and advocacy, including mandatory spending limits. Supporters of campaign finance reform like to ridicule Buckley as equating money with speech. In fact, Buckley did no such thing. Instead, Buckley recognized that limiting the amount of money one can spend on political advocacy has the effect of limiting speech. This is little more than common sense. For example, the right to travel would lose much of its meaning if we limited the amount that could be spent on any one trip to $100. Shays-Meehan and McCain-Feingold are Congress's most ambitious attempt yet to get around Buckley. The spending limits in each bill are supposedly voluntary, so as to comply with Buckley, but in fact the provisions are so coercive as to be all but mandatory, which should make them unconstitutional. Regardless of whether similar bills or some other campaign reform proposals become law, it is unlikely that political parties in the United States can be restored to the level of influence they enjoyed during their golden age. Some practitioners and political observers even question whether this would be desirable, given the high level of corruption that was associated with the parties of that era and the financing improprieties that captured headlines following the 1996 elections. Wall Street Journal. Campaign Finance Outlook. September, 17, 1997. P. 14 Greayson, James. The Histoyy of Elections: 1800-1950. Waveland Publishers, Ontario Canada. P. 124 New York Times. Candidates for Sale. January, 23, 1998. P. 12 ------------------------------------------------------------------------ A COMPARISON OF H.R. 2183 AND H.R. 3526 Members of Congress proposed more than 125 campaign finance reform bills in the House and Senate during the 105th Congress. However, only two of these received serious attention in the House. H.R. 2183, sometimes referred to as the House Freshman bill, was introduced by Reps. Asa Hutchinson (R-AR) and Tom Allen (D-ME), and H.R. 3526, commonly referred to as the Shays-Meehan bill, was introduced by Reps. Christopher Shays (R-CT) and Martin Meehan (D-MA). The Shays-Meehan bill was similar to the latter versions of S.25, the McCain-Feingold bill, which fell victim to a filibuster in February 1998. H.R. 2183 and H.R. 3526 were different from one another, but both would have had major implications for political parties had they become law. Party Fund Raising and Spending in Elections Had it been enacted, H.R. 2183 would have raised the amount of money that individuals could contribute to a national party from the current $20,000 per year to $25,000 per year (see Table 1). It would have encouraged individuals to give more contributions to national parties because it proposed to exempt national party contributions from the $25,000 aggregate annual limit for contributions to candidates and PACs. Just as important, the bill would have repealed the current limits on coordinated expenditures, opening the door to a tremendous increase in party activity in federal elections. The Freshman bill would have created the possibility for party money to be used to offset the funds that millionaire candidates spend on their own campaigns. It would have allowed parties to use their resources to counter issue advocacy advertisements financed by interest groups. The bill also was sensitive to the fact that the current law has allowed inflation to seriously reduce the parties' ability to raise and spend money. It proposed to peg party and other contribution limits to the Consumer Price Index to allow them to keep pace with the rate of inflation. The contribution and spending provisions of H.R. 3526 were not as generous to parties. The bill would have raised the contribution limit for local parties, but it would have made no changes in the limit for national parties. Moreover, it would have done little to encourage individuals to give larger shares of their federal contributions to parties because it did not establish a separate aggregate limit for them. Consistent with its less favorable treatment of parties, H.R. 3526 would have left the current coordinated expenditure limits intact for most candidates and banned coordinated expenditures for candidates who spent more than $50,000 in personal funds. The bill also failed to index party (and other) contribution limits to the Consumer Price Index. Similarly, H.R. 2183 would have allowed parties greater freedom in carrying out communications in connection with its federal candidates' campaigns. This bill would have enabled the parties to continue to make independent expenditures in federal elections, and it would have introduced no changes in the realm of issue advocacy advertising. H.R. 3526, by contrast, would have banned parties from making both coordinated and independent expenditures in connection with the election of a single candidate. H.R. 3526 also proposed to tighten the definitions of what constitutes coordination and cooperation, and it sought to expand the definition of what constitutes issue advocacy to prohibit parties from spending money on issue advocacy within sixty days of an election. Both bills would have prohibited national parties and federal candidates from raising or spending soft money. However, H.R. 3526 would have been more detrimental to parties because it would have prohibited state and local parties from spending soft money in connection with federal elections. H.R. 2183, in contrast, would have allowed state parties to continue to spend soft money in connection with federal races as long as they used the Federal Election Commission's allocation formulas for determining the appropriate hard-soft money split. More importantly, because H.R. 2183 would have allowed parties to make unlimited coordinated expenditures in federal races, its ban on national party soft-money transfers would have had little impact on the parties' ability to participate in those contests. Indeed, by repealing the caps on coordinated spending the bill would have encouraged parties to maximize hard money expenditures they made in connection with federal elections. This would have had the potential to increase the amount of party money that flows through the FECA's regulatory framework, thereby improving the level of disclosure in the campaign finance system--a goal that is supported by most political reformers and observers (Citiz Despite the fact that H.R. 2183 was more favorable to parties, both bills could have some unintended consequences on the distribution of power within the parties' organizational apparatuses. For example, both bills' soft money prohibitions had the potential to reduce the influence of national party organizations on state and local party committees. There are currently no limits on soft money fund raising, spending, and transfers by national parties. Because they were not allowed to contribute or spend soft money directly on behalf of federal candidates, national parties used these funds to purchase buildings, computers, media studios, and other equipment that have strengthened the committees organizational capacities and their abilities to assist their candidates. The national parties also distributed soft money to help state and local party organizations modernize their operations and better serve candidates. In the past, much of this money was used to hire professional executive directors, computerize data processing and accounting procedures, and purchase voter lists. The national parties' party-building efforts have contributed to a reversal of the traditional flow of power from county and state party committees upward (Bibby 1998). From the late 1980s through the 1994 elections, national parties transferred large sums of soft money to state parties for campaign-related activities commonly referred to as "coordinated campaigns." These consisted of targeting studies, polls, and voter registration and get-out-the-vote drives that were designed to benefit federal and nonfederal candidates whose names appear on the ballot. The national parties distributed soft money to state and local party committees in accordance with their own strategies. These expenditures enabled them to further increase their influence over state and local party committees. During the 1996 elections, national party organizations distributed substantial sums of soft money for the purposes of broadcasting issue advocacy advertisements. Some issue advocacy ads were intended to set the national political agenda or influence the presidential election. Others were intended to set the agenda in a specific House or Senate election or to praise or attack an individual congressional candidate. Some state party committees had input into the content of the ads, but in many cases they merely served as conduits for payments to the political consulting firms that produced the ads or placed them on television. This demonstrates the degree to which the national parties have been able to use soft money to increase their clout. H.R. 2183's ban on raising, spending, and transferring soft money to state parties would have weakened the influence of national parties vis-à-vis state and local party committees. H.R. 3526 had a similar provision. It also would have prohibited national parties from spending soft money on party-building activities and banned national and state parties from spending soft money during elections. The latter bill, however, would have had a greater impact on national parties because they would have been unable to mount coordinated campaigns or broadcast issue advocacy ads. Both bills probably would have altered the financial balance between the two major parties. The Republicans have enjoyed and will probably continue to benefit from an ability to raise more hard money than the Democrats (see Figure 1). The GOP enjoyed a fund-raising advantage of better than two-to-one in the elections held between 1978 and 1990. The gap has narrowed, but the Republicans continued to enjoy a significant advantage through the 1996 elections. The GOP's advantages stem from their early start at direct-mail fund raising, more business-like approach to soliciting contributions, and the greater wealth and homogeneity of their supporters. The Republicans' advantages are likely to grow should they remain in control of the Congress. The parties are closer to parity in soft money fund raising (see Figure 2). The Republicans raised more soft money than did the Democrats in the three election cycles for which records are available, but the differences are much smaller. The GOP raised only 11 percent more than did the Democrats in 1996. Eliminating soft money contributions would more than likely increase the Republican party's fund-raising and spending advantages. ------------------------------------------------------------------------ H.R. 2183 and H.R. 3526 were both defeated late in the 105th Congress. Both bills were considered under a voting procedure known as "queen-of-the-hill," in which several bills are offered as a group. First, each bill was voted on separately and then the bill that received the most support was voted on a second time. H.R. 3526 and H.R. 2183 were two of eleven campaign reform bills considered in early August 1998. The former bill won 237 votes in the initial balloting and the latter bill won only 147 votes. On the final vote, Shays-Meehan passed by a vote of 252-179, attracting the support of 190 Democrats, 61 Republicans, and representative Bernard Sanders of Vermont, the chamber's lone independent. However, the bill is unlikely to become law during the 105th Congress because the McCain-Feingold bill, the Senate version of the bill, met its demise in February 1998, when its supporters could not muster the necessary sixty votes to defeat a filibuster. H.R. 2183 did not fare as well as expected--a measure of the problems in legislating an enhanced party role. Why Campaign Finance Reform Never Works Bradley A. Smith is an associate professor at Capital University Law School in Columbus, Ohio and an adjunct scholar with the Cato Institute. ------------------------------------------------------------------------ Think campaign finance reform isn't an incumbent's protection racket? Just look at the spending limits included in the Shays-Meehan and McCain-Feingold bills, the hot "reform" bills on Capitol Hill. Shays-Meehan would limit spending in House races to $600,000. In 1996, every House incumbent who spent less than $500,000 won compared with only 3% of challengers who spent that little. However challengers who spent between $500,000 and $1 million won 40% of the time while challengers who spent more than $1 million won five of six races. The McCain-Feingold bill, which sets spending limits in Senate races, wou Bibliography: Word Count: 4389
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