There are many issues I don't understand, but only a few that make no sense to me. The one that's got me baffled at the moment is the reform of soft money, the unregulated, unlimited contributions that flow to the two political parties. Every Democrat in the Senate and House supports banning this practice, under the bill known as McCain-Feingold in the upper chamber and as Shays-Meehan in the lower one. Most Republicans adamantly oppose such legislation. But from the point of view of rational self-interest, the two parties would now seem to have it precisely backwards.
Here's why: Republicans retain a big advantage in overall political fund raising. According to the latest Federal Election Commission numbers, the GOP raised $692 million in the 2000 election cycle while Democrats raised $513 million. Republicans also have a big advantage in the category of "independent expenditures," which are not included in these numbers. But in one category of campaign cash, the Democrats have in recent years pulled even with the Republicans.
That category is soft money. In the last election cycle, the two parties raised nearly identical amounts: $244 million for the GOP and $243 million for the Democrats. And when you break down the soft money into its components, Democrats come out on top in one that is crucial. The Democratic Senatorial Campaign Committee, which as its name implies tries to help the party's senatorial candidates, raised $20 million more in soft money than the Republican Senatorial Campaign Committee (while lagging $9 million behind the GOP in hard money earmarked for Senate campaigns). A new study by the Center for the Study of Elections and Democracy at Brigham Young University ties this $11 million advantage to the Democrats' gain of four Senate seats in the 2000 election.
Of course, it's not always possible to predict what will happen when you tinker with campaign finance law. The last major round of campaign finance reform, which followed Watergate, left us PACs and soft money as unintended consequences. Nonetheless, it's pretty clear that if you took soft money out of the equation, the short-term advantage would accrue to the Republicans. Instead of a 7-5 advantage in party money, the GOP would have an advantage of better than 3-2. In other words, getting rid of soft money would result not in a more level playing field for the two parties but in a more tilted, if smaller, playing field for Republicans.
This outcome becomes even more likely under various realistic scenarios for getting McCain-Feingold through the Senate and onto the president's desk. (Shays-Meehan passed the House last session.) If Democrats agree to increase the contribution limits on hard money in exchange for doing away with soft money, Republicans would be even better off than under a straight-up soft money ban. The reason is that Republicans have a lot more hard money donors. Democrats have Denise Rich-type rich people who give them hundreds of thousands of dollars in soft money. But when it comes to the lumpen rich, Republicans predominate. That's why George W. Bush was able to raise an unprecedented $100 million in hard money for his own campaign during the primaries, in amounts of $1,000 or less. If instead of being able to give $1,000 to a candidate per election and $25,000 per calendar year in total, individuals were able to give as much as $3,000 and $75,000, respectively--as proposed by Sen. Chuck Hagel of Nebraska in his alternative soft money ban--Democrats would be the ones most likely to suffer. And if McCain and Feingold agree to drop their restrictions on independent expenditure campaigns in order to get their soft money ban passed--or if the independent expenditure restrictions in their bill are overturned on constitutional grounds, as is likely--the bottom line would be even worse for Democrats.
This is the reason that a few Democrats close to the party fund-raising machine have never been enthusiastic about campaign finance reform. When Bill Clinton broached the issue of campaign finance reform in 1993, it was laid to rest by then-Speaker of the House Tom Foley, who didn't see any reason to tamper with a system that had left Democrats in control of Congress for the better part of 40 years. Lately, the only prominent Democrat openly skeptical about a soft money ban has been Robert Torricelli, the New Jersey senator who headed the Democratic Senatorial Campaign Committee during the last campaign cycle. Officially, Torricelli is committed to McCain-Feingold. And now that he's enmeshed in a heavy-duty campaign fund-raising scandal of his own, he's not stressing his objections to reform. But when given a chance in the past, Torricelli would argue, quite reasonably, that McCain-Feingold could hurt Democrats, especially if it passed without restrictions on independent expenditures.
Various other Democrats voice such concerns, but only privately. "The irony of this whole thing is that if McCain-Feingold passed in current form, Democrats would be screwed. The most devious thing the Bush administration could do is just sign the bill," one former administration member told me. Says a Democratic strategist: "There are an increasing number who realize it's not good for the party. If you hooked the senators up to lie detectors and told them Democrats would go down to 40 seats, half of them would still say they're for it. The other half would be concerned with self-preservation."
From a material standpoint if not a moral standpoint, campaign finance reform is a zero-sum game. If it's bad for Democrats, it has to be good for Republicans. Curiously, though, Republicans don't seem to waver in their opposition to McCain-Feingold any more than Democrats are wavering in their support of it, at least so far. Trent Lott, the Senate majority leader, recently announced that he would allow a vote on the bill, which he has in the past resisted. But most reform advocates, such as Fred Wertheimer of Democracy 21, think this is merely a ruse. Instead of using the unattractive method of a filibuster to kill the bill, Lott and Sen. Mitch McConnell, the leading Republican foe of reform, will blow it up with killer amendments. And George W. Bush remains opposed to McCain-Feingold in its present form.
Which leaves the question of why the political parties aren't now in the process of reversing their familiar positions on soft money. One possibility is that some politicians haven't entirely woken up to the new reality. The two sides staked out positions on the issue a decade ago when soft money was just emerging as a factor in campaigns and when it did clearly favor Republicans. Maybe they haven't figured out what's changed. But that explanation suggests politicians don't understand their own self-interest, which cuts against most of what we know about them.
A better explanation, perhaps, is that the respective positions of the two parties are not based primarily on material self-interest but rather on belief. Democrats are revolted by the quantity of money in politics. They don't like fat cats buying influence, even if they're the ones selling it. Republicans, on the other hand, are viscerally opposed both to regulation and to restrictions on what rich people can do with their money. That gets a little closer to the nub of it. But again, it seems unlikely that such principles are powerful enough to cause politicians of either party to reduce their own chances of getting re-elected.
Another, slightly more plausible answer is that Democrats don't have much faith in their own ability to keep up with the GOP in raising soft money, especially now that Republicans control both the executive and legislative branches of government. Conversely, Republicans may believe that soft money parity is only a temporary condition--after all, conclusive evidence that it had occurred emerged only last month. That may be part of it. Yet another explanation might be that Democrats figure that less money in the system as whole is ultimately better for them and worse for Republicans given the GOP's stronger financial base. Finally, former Sen. Robert Kerrey of Nebraska, now president of New School University in New York, points out that Republicans who oppose campaign finance reform are also responding to constituent groups like the National Right to Life Committee, the National Rifle Association, and other conservative groups that abhor McCain-Feingold because they think its independent expenditure provisions would limit their freedom.
It is true that money in politics, like water, finds a way and that the consequences of this kind of reform are always hard to predict. So to some extent, McCain-Feingold is a gamble, which Democrats may be more inclined to take because they're the underdogs under current arrangements. But in the end, I think both parties will come to realize that they're working against their own self-interest. When McCain-Feingold comes before the Senate next month, it may be Democrats who try to quietly sabotage it with killer amendments while Republicans mute their familiar objections. The good news is that once the two sides realize that the tables have turned, the issue will be up for grabs. Anything could happen--including real reform.