style="font-size:15px;"> Many Republicans see spending limits as giving further advantage to incumbent legislators with widespread name recognition at a time when a majority of incumbents are Democrats. Some recent statistics do back up the argument that spending limits could disadvantage challengers. For example, a study by the non-partisan Committee for the Study of the American Electorate found that of 32 winning Senate challengers between 1978 and 1988, only seven stayed within the spending limits proposed by Senate Democrats in 1990 (Peck 1990, 3).
A basic philosophical disagreement also lies behind this dispute. The Democrats insist that rising costs and the escalating money chase cannot be solved unless the total amount of money in campaigns is capped through expenditure limits. The Republicans counter that the chief problem is not the amounts of money, but its sources. They have focused on limiting certain kinds of money considered tainted (i.e., PACs) and replacing it with other sources they regard as more desirable (i.e., donations from individuals and political party money).
The Republicans also oppose public financing, which they tend to regard as an inappropriate use of tax dollars. This is a second major partisan difference between them and the Democrats, although there is by no means acceptance of public financing by all Democrats.
Several factors converged to bring campaign finance reform to the forefront of the legislative agenda when the 101st Congress convened in January 1989. It had become apparent that a bailout of the nation’s savings and loan industry was going to cost several hundred billion dollars. Attention focused on the California-based Lincoln Savings & Loan (S&L). It was revealed that Lincoln’s owner, Charles Keating, and his associates had given $1.3 million to political and semi-political committees associated with five senators who had met with federal regulators on Keating’s behalf.14
Then, House members began moving after the 1988 election to give themselves a substantial pay raise, in order to deal with the issue almost two years before they would again face the voters. A fire-storm of protest erupted, and the move was temporarily shelved. To make the pay raise more palatable, House leaders promised action on ethics and campaign reform measures.
House Speaker Jim Wright of Texas, then the subject of an ethics investigation that would ultimately lead to his resignation, appointed a bipartisan task force on campaign reform in January 1989. House Democrats coalesced around two bills proposing campaign spending limits and aggregate ceilings on PAC donations. The chief difference between the two bills was over public financing, reflecting divisions within the Democratic majority on this issue. One bill sought to achieve voluntary compliance with spending limits in return for discounts on postal rates and television ads; the other included public matching funds.
In the Senate, Boren reintroduced his 1987-88 proposal for public financing of Senate candidates only when an opponent exceeds spending limits. The Republicans, led by Senator Mitch McConnell of Kentucky, countered with a cut in PAC contribution limits, an increase in the amount that could be donated by an individual, and fewer restrictions on the money that political parties could give to candidates.
In June 1989, President Bush offered his own proposal. With the Democrats in control of Congress, it was aimed largely at reducing the advantages of incumbency by doing away with most PACs and forcing candidates to “zero out” campaign treasuries after each election. The latter proposal was designed to end the practice whereby incumbents accumulated large “war chests” in an effort to scare away potential challengers. Not surprisingly, the plan was strongly attacked by the Democrats.
By the end of 1989, the co-chairmen of the House task force, Democrat Al Swift of Washington and Republican Guy Vander Jagt of Michigan, reached agreement on some secondary issues. These included guaranteeing priority for political candidates in the purchase of broadcast time, re-establishing tax credits for small donations and doing away with leadership PACs.15 But, on the major issues - expenditure limits, public funding, PACs and the role of parties - sharp partisan divisions remained.
Just as ethics problems had placed pressure on House Democrats to act on campaign reform in 1989 (ethics controversies forced both Wright and Majority Whip Tony Coelho from office), the Senate came under similar pressure in 1990 as a result of a decision by the Senate Ethics Committee to investigate the five senators involved in the Keating S&L affair. In an effort to avoid a repeat of the 1987-88 battle, the two Senate leaders - Democrat George Mitchell of Maine and Republican Robert Dole of Kansas - named a panel of academic and legal experts to come up with possible solutions.
The panel’s recommendations, released in early March, were initially hailed by both political parties as the basis for a possible compromise (Campaign Finance Reform Panel 1990).16 The panel proposed what became known as “flexible spending limits.” Exempt from these limits would be relatively small contributions to Senate candidates from in-state residents, along with spending by political parties for research, voter-registration drives and get-out-the-vote efforts.
The panel sought to compromise between the Democrats’ insistence on spending limits and the Republicans’ contentions that the chief problem is the source of campaign money. While maintaining a form of expenditure ceilings, the proposal favoured political party contributions and individual donations from voting constituents over PACs and out-of-state individuals - both regarded as major sources of special interest money. In addition, the panel did not recommend direct public financing, an idea strongly opposed by the Republicans. Rather, it suggested reduced broadcast rates and postal discounts combined with tax credits for in-state contributions as incentives for candidates to abide by spending limits.
The political opening created by the panel’s report was soon lost amid posturing by Senate Democrats and Republicans, both eager to be seen by voters as wearing the mantle of reform. Although there were also internal differences within each party, the Democrats and the Republicans formulated separate bills as possible substitutes to one that had been reported out favourably by a Democratic-controlled Senate committee.
The Democratic-sponsored bill that passed the Senate in August 1990 proposed that candidates who comply with spending limits be given vouchers with which to buy television time along with discounted mail rates. The Senate legislation also would have provided direct public funding to participating candidates whose opponents exceeded the spending limit in a particular state. The House Democratic bill included free television time and mail discounts. But, reflecting scepticism on the part of some House Democrats regarding the ability of the FEC to administer a program of direct public funding for congressional candidates, the House bill did not provide for such a program.
Another issue to split Democrats and Republicans was how to regulate PACs. In general, the Senate and House Democrats differ on reducing PAC contribution limits or prohibiting PAC contributions entirely, but both have favoured aggregate ceilings on the total any candidate can accept from all PACs. Some Republicans have proposed reducing the current $5 000 per election limit that a PAC is allowed to give to a candidate, while others want to ban PAC contributions entirely. Proposals to reduce contribution limits seem aimed at the Democratic-leaning labour PACs and certain other membership PACs, which have tended to contribute the maximum allowed under law. Some have complained that the Democratic proposals for aggregate limits would enable a candidate to accept large amounts of early “seed money” from well-endowed PACs, thus preventing the smaller PACs from contributing at all if the candidate reached the limit early.
Two provisions faced almost certain judicial challenges if the Senate package had become law: a ban on PACs and a system of contingency public financing. In fact, the Senate bill contained a stand-by scheme for limiting PAC contributions in the event that the ban on PACs was found to be unconstitutional. (Besides corporate, trade association and union PACs, the prohibition included covered “non-connected” or ideological or issue PACs, a move potentially in conflict with constitutional rights.) During the Senate debate, contingency public funding was challenged as a coercive measure because it serves to punish a free-spending candidate by giving public
