With Victories like These ...
The glaring inadequacies of Shays-Meehan
by Ellen Miller
The American Prospect magazine, March 25, 2002
What a cruel twist of fate: campaign finance reform that benefits
Republicans and big money.
The Shays-Meehan bill is back-to-the-future reform: legislation
that takes us back to just before 1980, when there was no "soft
money" but still a huge imbalance in the influence of the
big contributors over the rest of the population. Under the terms
of the bill that passed the House, the national parties' committees
can no longer raise soft money-the unlimited and unregulated contributions
that totaled $498 million in 2000. A very good thing, that. But
the trade off to eliminate this most notorious campaign finance
"loophole" will actually enhance the power of wealthy
special interests, for it loosens a whole series of strictures
on hard-money donations-and hard money has already eclipsed soft.
Total hard-money contributions to candidates, political action
committees (PACs), and parties in the 2000 election cycle came
to $1.8 billion, over three times the soft-money total.
To ease shock to big-money politics, Shays-Meehan contains
three separate increases in the amounts that individual donors
can give in regulated hard money, plus a huge exemption that enables
campaigns to sidestep the limits altogether. The first increase
involves the aggregate contribution limit for individuals. The
legislation nearly doubles it to $95,000 per two-year election
cycle. The second hike is in what individuals can give to national
political parties, which rises from the current $20,000 per cycle
per party committee to $ s7,500. Within these limits, the bill
also provides for another dramatic increase: The amount individuals
can give to House and Senate candidates doubles to $2,000 per
But say that a self-funding multimillionaire candidate is
running for office, as is frequently the case these days.
Should that happen, Shays-Meehan raises the cap on individual
donations to that candidate's opponents from $2,000 to $12,000.
Another limit-that imposed on the political parties for their
coordinated expenditures to supplement the campaigns of party
candidates within the states-is lifted altogether.
Politically, this provision could prove more unsettling for
the Democrats than for the Republicans. While only five of the
19 federal legislative candidates who spent $1 million or more
of their personal money in 2000 won their races, four of them
were Senate Democrats- three of them newcomers (Jon Corzine of
New Jersey, Mark Dayton of Minnesota, and Maria Cantwell of Washington)
and one returning (Herb Kohl of Wisconsin).
So who would gain power from these fixes? To understand just
how off kilter this reform is, you have to understand one primary
fact: Today, less than one-tenth of 1 percent of Americans make
a contribution of $1,000, but these 340,000 individuals accounted
for fully $1 billion of the $2.9 billion in hard and soft money
that politicians, PACs, and parties banked in 2000. Most of this
money comes in large bundles from the "economically interested"-executives
and business associates who've been arm-twisted into supporting
a corporation's electoral favorites.
Under the new legislation, those bundles will only grow larger.
Republican Senator John McCain of Arizona admitted to being embarrassed
recently by the disclosure that he took $31,000 from individuals
associated with the now bankrupt telecommunications firm Global
Crossing as he argued their case before the Federal Communications
Commission. Just how tainted would he feel if he got double that
amount (allowable under the new limit) from them the next time
he runs for president?
After all these years of struggle, why did reformers settle
for so little?
In fact, after more than a decade of seeing their more ambitious
ideas come to naught even as the amount of money in politics grew
exponentially, reformers and :heir editorial-board allies felt
that they desperately needed a win. According to Derek Cressman
of USPIRG (the only campaign-finance-reform organization to oppose
the bill), Kentucky's Republican Senator Mitch McConnell "wore
down the reform movement by defeating stronger legislation year
after year. Legislators kept compromising and the watchdogs let
them do that." As a result, the reform package grew steadily
weaker. "I can't think of any other legislation that's had
a tough fight that ended up actually rolling things back,"
Cressman says. "This bill could have passed easily 1o years
Speaking not for attribution, some reformers admit that forward
movement-even if only one small step forward-became their goal.
A second factor, perhaps perversely, was the Democrats' growing
proficiency at raising big money themselves-a skill that may have
lulled them about the political ramifications of Shays-Meehan.
Buoyed by near-parity with the GOP in soft money fundraising,
the Democrats generally-and party chairman Terry McAuliffe particularly-came
to believe that they could compete in the hardmoney game, too.
That made the bill's tradeoff between hard money and soft money
As the proposed reforms grew steadily more modest, their appeal
to the center and center-right grew. Moderate Republicans in the
Senate and the House took the lead and the Democrats stood back
to let them carry the fight. A seemingly enlightened segment of
the business community, some of whom were executives tired of
being dunned for six-figure checks, jumped on the bandwagon out
of their own self-interest. The scope of reform dwindled until
hardly anything remained at all.
There should be nothing surprising in the spectacle of White
House Press Secretary Ari Fleischer trying to steal credit for
the bill on behalf of his boss. And why shouldn't Bush sign it?
Shays-Meehan favors Republicans. In the 2000 election cycle, the
GOP outraised the Democrats in hard money $466 million to $275
million; and in just released figures for the current cycle, the
Republicans are leading the Democrats in hard money $131 million
to $60 million. Moreover, Shays-Meehan certainly favors the incumbent
president in his 2004 campaign. Bush is a hard-money dynamo: In
2000 he raised $103 million in hard-money donations for the primaries
alone, while sitting veep Al Gore raised a paltry $46 million
in hard money. Worse yet, signing Shays-Meehan helps to inoculate
Bush from the taint of Enron's political money. Nonetheless, Bush
taking credit for campaign finance reform, notes Public Campaign
analyst Micah Sifry, is "like Harry Truman claiming credit
for sparking the nuclear disarmament movement by dropping the
bomb on Hiroshima."
But this dubious victory may hold the seeds of more sweeping
changes. One thing is certain: The kind of incremental reform
that the House has enacted is far from the kind of dramatic change
that can actually renew people's faith in our political system.
But passing Shays-Meehan at least clarifies the challenge.
For years, progressives have endorsed public financing, specifically
public financing that covers both primary and general elections.
The AFL-CIO has long supported it, and recent converts include
the NAACP, the ACLU, the Sierra Club, and the National Organization
for Women. The small state experiments in Maine and Arizona have
shown what a huge difference it can make. Activists on the national
front are poised to move forward. The next victories are likely
to come at the state level in judicial elections. Spurred by the
American Bar Association's endorsement of full public financing
for judicial races, activists in North Carolina, Wisconsin, and
Illinois are moving to change their state laws. Public financing
of campaigns for the legislature, though further down the road,
is most likely in Minnesota, New Mexico, and Connecticut.
Now that soft-money reform is off the table, it's time to
focus on the real deal.
Prospect senior fellow Ellen S. Miller was executive director
of the Center for Responsive Politics for l2 years and is the
founder and former president of Public Campaign.