JOHN MCCAIN RETURNED TO Washington last week from his post-campaign vacation in Bora-Bora. His first appearances on Capitol Hill had the kind of fanfare that greeted Elvis when he returned from Germany. McCain is a rock star, and, to their chagrin, his Senate colleagues are now like 99 roadies. None boasts the strong national following McCain now has.
That, of course, creates a dilemma for both the Senate Republican establishment, embodied by majority leader Trent Lott and Rules Committee chairman Mitch McConnell, and for George W. Bush. Lott and McConnell would just as soon treat McCain with the open scorn they showed him before his stunning presidential campaign; Bush would be cheered by his conservative base if he treated McCain with the icy disdain he showed in his March 16 interview with the New York Times.
But to do so would be foolish and counterproductive. Instead, they should, and probably will, make nice. To win the general election, Bush needs both McCain’s support and McCain’s supporters. And he needs a better position for himself and the Republican party on McCain’s signature issue, campaign finance reform. The official GOP line — the system is just dandy, except that all limits need to be removed so candidates can bring in more money — will be hammered during the campaign, by McCain among others. Such a turn of events would undermine Bush as he tries to attack Al Gore, and leave both him and the GOP in the position of defending the indefensible. Fortunately, an opportunity is at hand to solve these problems in one fell swoop.
The Senate Rules Committee, led by Mitch McConnell, will soon take up a compromise campaign reform plan drafted by McCain ally (and potential Bush running mate) Chuck Hagel of Nebraska. The Hagel plan is different in several key respects from the McCain-Feingold bill Lott and McConnell oppose. It can be a perfect starting point for a new synthesis. Bush could get things moving by deputizing his Senate liaison, Paul Coverdell of Georgia, along with perhaps McConnell and Senate majority whip Don Nickles, to negotiate directly with McCain allies Hagel and Fred Thompson (with McCain, of course, kept in the loop during the negotiations). Although the gulf between the Bush/Lott/McConnell view and the McCain position seems large from the rhetoric and history, the Hagel plan shows that compromise is there to be had.
To be sure, any real and realistic reform compromise will provoke screams of outrage from the Hezbollah of the Right, led by Douglas Johnson of the National Right to Life Committee and the Rev. Pat Robertson (as well as by the Shiites of the Left, led by Ellen Miller of Public Campaign and John Moyers of the Florence Fund). But what could be better for Bush now than to show that he is not too timid to take on the loony elements of his own party?
What are the ingredients of a real reform compromise? They include the following:
1. End soft money — the right way. I know, I know — Bush took a clear stand in defense of soft money. He ought to rethink that position. Republicans outraise Democrats at every level of fund-raising; the advantage remains with or without soft money. Every opponent of complicated regulatory regimes should be opposed to soft money. It was a creature of a regulatory body, a separate source of money for “party-building,” that has been systematically distorted and misused by both Democrats and Republicans. There should be one kind of money in politics, with no artificial distinctions in how the dollars can be used.
The trick is to make sure that there will be enough hard money for party activities. So here’s an appropriate compromise: End soft money at the federal level. End all transfers from one state party to another, or from a state party to the national. And ban federal officials and candidates, including the president and vice president, from soliciting or raising state party soft money. Now comes Bush’s opportunity for innovation.
Create a separate limit on the hard money individuals can give to parties, and make it reasonably generous — say, $ 30,000 per year, indexed to inflation. Currently, individuals can give no more than $ 20,000 per year directly to political parties (out of a total of $ 25,000 they can give to parties and candidates). Given the power of individual candidates, that leaves little room for parties to raise hard money — which is why they have favored the soft variety. Creating a separate and generous limit for contributions to parties would solve that problem, while removing the worst abuses on the soft money side. It would eliminate the corruption that comes with unlimited contributions, especially the shakedown of donors by powerful politicians, and make everybody more honest.
2. Tackle the phony “issue ad” problem by barring unions and corporations from electioneering. Bush’s own reform proposal called for eliminating corporate and labor soft-money contributions, leaving individuals alone. That reflected an understanding that corporations and unions should not be treated like individuals, a distinction both Congress and the Supreme Court have made. Congress banned direct corporate contributions for campaigns in 1907, and for labor unions in 1947. The Court has upheld those bans numerous times. Now unions, especially, have gotten into elections in a big way through the use of massive ad campaigns disguised as “issue advocacy,” with little issue content, but lots of targeted attacks on lawmakers they want defeated. They can use union dues (as corporations can use money directly from their coffers) as long as their ads don’t use the so-called “magic words” defined in a footnote in the Supreme Court’s Buckley v. Valeo decision as express advocacy — words like “vote for,” “vote against,” “elect,” or “defeat.” Such ads often run right before an election and are clearly designed to elect or defeat candidates. Unions and corporations should be prohibited from using dues and corporate funds for such purposes.
3. Disclose the funders of electioneering ads. The First Amendment allows individuals the right to run issue communications. But voters have the right to know who is communicating. Bush’s friends, the Wylys, who masterminded the attack ads run by “Republicans for Clean Air” against John McCain’s environmental record, had a right to fund those ads. But they went out of their way to disguise their identity, paying two intermediaries to keep their role hidden. Major investigative work by reporters smoked them out, but few of these massive last-minute attack campaigns, especially if they target a congressman or senator, will be given the same scrutiny. Broadcast ads attacking candidates should have their sponsors and patrons — and not just some sham front person — disclosed. Broadcasters are required to record the sponsors of genuine campaign ads they air; they should have a similar requirement for these electioneering ads, but one that gets behind the facade and puts the identities of sponsors on the Internet for voters to see and assess.
4. Make disclosure the answer to the “paycheck protection” problem. There are two steps to take here. One is to stop unions (and corporations) from spending dues and revenues for ads clearly meant to win elections. The second is to make their leaders accountable. Unions, like corporations (and Congress, for that matter) are representative institutions, with elected leaders who are given discretion to use their revenues. As a citizen, taxpayer, and voter, I can’t veto the use of my tax dollars for pork-barrel projects; all I can do is vote for representatives who share my values, by assessing how they vote.
The best way to hold elected leaders in representative institutions accountable for how they use the dues (or taxes) paid by those they represent is to have full disclosure of how the money is spent. Currently, corporations do not have to disclose in their annual reports any of their political spending, including soft money expenditures. Nor do unions have to disclose their spending of dues moneys on so-called “issue advocacy” campaigns and get-out-the-vote efforts. So push for real disclosure — then let union members who don’t like how their money is being spent vote for new leaders.
5. Eliminate the new tax-dodges employed by campaign-law evaders. The latest rage, crafted by high-priced campaign finance lawyers, is to use Section 527 of the Internal Revenue Code. This section allows political groups to organize themselves in ways that shield them from having to file income tax returns and that allow them to raise unlimited sums of money from any source, including foreign ones. The groups are not required to disclose anything about their funds, and there are few limits, if any, on how the money is used. Powerful lawmakers like Tom DeLay are masterminding their own Section 527 groups, with no sunshine at all on who the donors are, how the money is being raised, or how it is spent. There is no First Amendment issue here, no question of regulations run amok — just a basic issue of right and wrong. This is wrong.
6. Raise the contribution limits for individuals. This is the element that gets the Left exercised, but their objections are wrongheaded. Low contribution limits make it harder for candidates to raise the money necessary to get their messages across. They encourage much of the fancy dancing and subterfuge that has taken over the campaign system and create unfair advantages for multimillionaire candidates. At a minimum, individual contributions to candidates should be raised to take into account inflation over the past quarter-century, raising them from $ 1,000 to $ 3,000, and they should now be indexed for future inflation to avoid the same problem a decade and more from now.
7. Get small donors back into the political system. The Left may be wrong about current contribution limits, but they are right that the field should not be dominated by the big guys. There has been a decline in the proportion of small donors involved at the federal level, dating back to the Tax Reform Act of 1986, which eliminated the tax credit for small political contributions. It is time to bring it back — this time as a 100 percent credit for contributions of $ 100 or less, with the credit limited to lower- and middle-income people. That would keep the cost down, and avoid giving a windfall to larger donors. Many states have their own tax credits for small donors — they work, bringing more people into the game and giving them a stake in the political system. This reform won’t hurt Republicans — they actually raise more money from small donors than Democrats do. It will probably help the GOP in another way, by putting the party on the side of the little guy.
8. Create a “seed money” mechanism to make it easier for non-wealthy candidates to get started. Early in a campaign, let candidates for federal office raise a maximum of $ 100,000 in contributions of up to $ 10,000 — all immediately disclosed on the Internet and in the press. This would give potential candidates a chance to test the waters, form an organization, and get rolling. It would also lower considerably the many “barriers to entry” candidates now face.
9. Level the playing field for non-millionaire candidates. The First Amendment clearly protects individuals who spend their own money on their own campaigns. No reform can change that. But reforms can make it possible for non-millionaires to compete. How? Raise the contribution levels for candidates faced with opponents spending tons of their own money. If my opponent spends $ 100,000 of his or her own money, let me raise up to that amount in contributions of up to $ 10,000 — and let me do so for each $ 100,000 a self-financed candidate spends. This will make it easier for non-millionaire candidates to run, and may discourage millionaire candidates from attempting to win by the sheer muscle of their bank accounts.
There is not a single element here that would violate any sacred principle held by Bush or his conservative adherents, that would seriously disadvantage the GOP, or that should trigger an adverse reaction from McCain or his allies. In the Senate, it might lose the Bob Smiths on the right and Paul Wellstones on the left, but could gain perhaps 70 votes across party lines. It is possible that it could trigger opposition from Democratic party leaders, and fail on a filibuster by the Democrats. That would be unfortunate, but it would put the GOP on the high ground, which would be the first time on this issue. There is a deal to be had. Will Bush, McConnell, and Lott have the foresight and fortitude to take it?
Norman Ornstein is a resident scholar at the American Enterprise Institute.
