At its core, the McCain-Feingold bill was about getting rid of soft money. So far, so good. But as part of the deal, the Senate voted to hike hard-money limits. The Senate has thus exacerbated the money-and-politics problem. Assuming that the bill becomes law, we can expect a future in which campaign costs soar, elite donors tighten their grip on lawmakers, special interests get a bigger payback from politicians, and incumbents remain entrenched.
So much for the promise of campaign finance reform.
As we have followed the money trail, we have seen how incumbents beat challengersat the fundraising game. In 2000, Senate incumbents outraised challengers in hardmoney by a ratio of nearly 2 to 1, according to the Center for ResponsivePolitics. (The gap is even starker in contributions from high-level hard-moneydonors, the very ones likely to take advantage of the new $2,000 per-candidate,per-election limits.) The incumbents raised an average of $1.8 million fromdonors of at least $1,000. By comparison, their challengers raised an average ofjust $646,000 from this same group of donors. Of the four liberal Democrats whopicked up Senate seats in 2000, two were reliant on huge private fortunes. Ifhigh-level donors give more, as they surely will since the new rules encouragedoing so, it is clear that incumbents will benefit the most.
And the wealthy will dominate like never before. Today the tiny donor class ofpeople who gave $1,000 or more to a federal candidate comprises only one-eighthof 1 percent of the voting population. They already get a huge return on theirinvestment. Most of them give because they have parochial interests in the lawsthat elected officials are charged with making. The hike in the amount of hardmoney an individual can give to candidates, coupled with a second McCain-Feingoldprovision that ups the overall limits that individuals may give to federalpoliticians in a calendar year from $25,000 to $37,500, means that a couple withtwo children could actually dole out $300,000 over an election cycle. Now that'ssoft-money-size influence.
If you doubt that campaign contributors will figure this out, consider whathappens already under the current campaign finance rules. MBNA America Bank ispoised to be one of the biggest beneficiaries of bankruptcy reform legislationthat was recently passed by Congress and is sure to be signed by the president.Now, follow the money. Charles Cawley, the company's CEO, is one of PresidentGeorge W. Bush's "Pioneers," the volunteer fundraisers who pledged to raise atleast $100,000 apiece for his election. Overall, MBNA employees, their familymembers, and the company's political action committee bundled $240,700 to thepresident's campaign--all hard cash. They also bundled $365,725 to members of theSenate Judiciary Committee, which had jurisdiction over the bill. Altogether,MBNA contributed about $2.3 million in hard money to candidates and parties inthe 2000 elections. Under McCain-Feingold, there is no question that such bundleswill get bigger.
Multiply the campaign finance power of MBNA times hundreds of industry groupingsand you get a good idea of who calls the shots in Washington. In the 2000elections, oil-and-gas companies distributed $33 million to candidates andparties in hard and soft money. Electric utilities gave $19 million. The miningindustry gave $6.6 million. Stack all that money next to the $1.4 million givenby environmental groups and you realize the kind of horrific imbalances that willresult if the contribution limits are doubled. McCain-Feingold doesn't change anyof that.
The incumbent-protection package our elected officials call "campaign financereform" does have a silver lining: Once the self-congratulation dies down, theescalation of raising abuses will help make the case to the American public thatwhat we need is comprehensive reform of the entire way we finance elections.
