Outside the Beltway

House Votes to Cap 527s

James Joyner · Thursday, April 6, 2006 · 4 comments

WaPo fronts a story entitled, “Campaign Finance Measure Approved” with the ominous subtitle “House Bill Would Cap ‘527’ Donations, Used Largely by Democrats.”

The House approved campaign finance legislation last night that would benefit Republicans by placing strict caps on contributions to nonprofit committees that spent heavily in the last election while removing limits on political parties’ spending coordinated with candidates. The bill passed 218 to 209 in a virtual party-line vote.

Lifting party spending limits would aid Republican candidates because the GOP has consistently raised far more money than the Democratic Party. Similarly, barring “527” committees from accepting large unregulated contributions known as “soft money” would disadvantage Democrats, whose candidates received a disproportionate share of the $424 million spent by nonprofit committees in 2003-2004.

The 527 committees, named for a section of the tax law, are tax-exempt organizations that use voter mobilization and issue-based ads to influence federal elections. They grew in importance after the 2002 McCain-Feingold campaign finance law barred federal candidates and national parties from accepting unlimited donations from individuals, unions and corporations. In 2003-2004, for example, international financier George Soros broke all contribution records by giving a total of $27 million to pro-Democratic groups such as America Coming Together and the Media Fund.

While it’s true that Democrats beat Republicans in the exploitation of 527s in the last cycle, reporter Thomas Edsall strangely fails to mention the most important of all the 527s, the Swift Boat Veterans for Truth. One could certainly argue that they had more impact on the 2004 election than Soros and all the other Democratic 527s combined.

Further, while it is almost certainly true that the party in power will work to “reform” the system to their own advantage, they had some interesting bedfellows–and opponents:

Organizations such as Common Cause, Democracy 21 and Public Citizen, past legislative adversaries of the GOP, were allied with Republicans in yesterday’s floor fight. Democrats had the backing of a long list of conservative leaders opposed to regulation, including Grover Norquist of Americans for Tax Reform and Paul M. Weyrich of the Free Congress Foundation.

And, of course, if the Democrats decide that this change would work to their disadvantage, the chances of this getting through the Senate are practically non-existent. The Senate is, after all, the saucer that cools the passions of the House.

That said, I agree with Steven Taylor and Joe Gandleman that, however understandable this is intellectually, doing so under the cover of “reform” is disengenous. Taylor observes, “This illustrates one of the many pitfalls of campaign finance “reform”—the fact that the party in power can work to construe the rules in a way that aids their tactics in fund-raising over those of their opponents. This is not a good thing, insofar as what we should be wanting in a democracy is open competition.” Gandleman dubs it “naked voting for political interest.” Then again, what else is new?

I disagree with Gandleman, though, that this demonstrates that “divided government is much better for the country (no matter which party controls the White House).” First, were Democrats in the majority in the House, they would pass rules that advantage them; that’s politics. As Betsy Newmark states, there has been plenty of hypocrisy on both sides of the aisle on this issue, which “just shows that there are no values at the basis of this debate, just raw political calculation.” Second, as noted earlier, the rules of the House make it much easier to get things like this through than in the Senate. The Framers created a system, though, that makes it very hard for narrow majorities to do outrageous things.

Taylor refers to an old post wherein he invokes The Scotty Rule of Campaign Finance Reform, the essence of which is that complexity brings its own problems. The bottom line is that any system of campaign finance regulation, even if it were designed by a well intentioned blue ribbon panel of Martian political scientists, will have loopholes that smart people will exploit.

To the extent that “reform” is a good thing, though, Ed Morrissey is right: There is a good reason to get rid of the 527s, regardless of which side benefits:

[T]his offshoot of the BCRA allowed millions of dollars to pour into campaigns from single benefactors such as George Soros. It laughably treated this money as somehow more pure than that going to political parties, even though its use was at least as partisan as any given directly to Democrats. Even worse, it put that money in the hands of people who have no accountability in the political process and allowed the parties and candidates to wash their hands of the messages it produced.

Indeed. And, remember, when BRCA (aka McCain-Feingold) passed, it was widely assumed that curtailing soft money would disadvantage Republicans. It quickly became evident that, despite the conventional wisdom, the Democrats are much more reliant on millionaire donors than the Republicans, who (again, counterintuitively) have a much better ability to raise money from small contributors.