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Pass Pence-Wynn So We Can Fix Coordinated Expenditures

Last week the House Administration Committee approved a campaign finance bill sponsored by Reps. Mike Pence (R-Ind.) and Albert Wynn (D-Md.) that would make significant changes to the nation’s campaign finance laws. The House is expected to vote on the Pence-Wynn bill before the August recess.

Potentially the most significant component of the Pence-Wynn bill is a proposal to abolish the limits that apply to political-party spending coordinated with federal candidates. Current law severely restricts such party spending, known as coordinated expenditures, on behalf of candidates.

The coordinated-expenditure limits do not prevent corruption or the appearance of corruption and serve no rational purpose in today’s campaign finance system. Regardless of what else Congress decides to do in the campaign finance area, it should repeal the coordinated expenditure limits and allow the parties to spend as much money as they want on behalf of, and in full consultation with, their candidates.

Under current law, political parties may only make coordinated expenditures out of hard dollars — that is, non-corporate, non-union donations received from individuals that are raised subject to the federal contribution limits. Soft money may not be used to make coordinated expenditures.

However, the current limits on coordinated expenditures are low. For the 2004 election cycle, state and national party committees were each limited to spending only $37,310 on behalf of U.S. House candidates. In U.S. Senate races, the coordinated spending limit varied based on the population of each state and ranged as low as $74,620 in the least populous states.

Thus, in the fierce South Dakota Senate race last year between then-Senate Minority Leader Tom Daschle and former Rep. John Thune (R), the Democratic and Republican state and national parties were restricted to spending less than $75,000 apiece on coordinated expenditures for the entire election, or about 13 cents per voter. Similarly, in Colorado, where Ken Salazar (D) defeated Pete Coors (R) in a key open-seat Senate race, the parties could spend only seven cents per voter.

The coordinated expenditure limits are adjusted for inflation each election cycle. Nevertheless, given that the cost of a postage stamp is 37 cents, the spending limits in effect in 2006 will still make it illegal for a political party to consult with a candidate about sending even one letter to every voter in any state or Congressional district in the country.

These Draconian party spending limits are an anachronism and serve no legislative purpose. Instituted in the 1970s, the coordinated party expenditure limits are a vestige of the many other spending limits that were declared unconstitutional by the Supreme Court in Buckley v. Valeo.

Passage of the campaign finance law co-sponsored by Sens. John McCain (R-Ariz.) and Russ Feingold (D-Wis.) has made the limits even more of an anachronism. Under McCain-Feingold, the national parties are barred from raising and spending soft money for any purpose, and state parties are prohibited from using soft money in connection with federal elections.

By enacting McCain-Feingold, Congress made a fundamental distinction between, on the one hand, political parties raising and spending corporate, union, and other soft-money funds in connection with federal elections — something Congress determined to have a corrupting influence — and, on the other hand, parties using hard money in federal elections, which Congress found did not create corruption and therefore sought to encourage. Given that every single dollar that a political party wishes to spend on coordinated expenditures must be made out of hard money, there is no anti-corruption rationale for continuing to limit these party expenditures.

Moreover, abolishing the coordinated spending limits for parties is sound public policy. Given that the coordinated expenditure limit is so low, political parties have, in recent election cycles, increasingly relied on independent expenditures to aid their candidates — a kind of spending that the Supreme Court has ruled cannot be limited. For example, in the 2004 cycle, the Democratic National Committee spent $120 million in independent expenditures on behalf of Sen. John Kerry (D-Mass.).

Even more striking in relative terms has been the increase in independent expenditures by the national Congressional party committees on behalf of House and Senate candidates. The National Republican Congressional Committee made $47 million in independent expenditures during the 2004 election cycle, which was 39 times more than what the NRCC had spent on independent expenditures in 2002. Similarly, the National Republican Senatorial Committee made $20 million in independent expenditures during the 2004 cycle, which was 20 times greater than what it spent in 2002.

The growth in independent spending has been equally striking on the Democratic side. During the 2004 cycle, the Democratic Congressional Campaign Committee spent $36 million on independent expenditures — an amount 36 times higher than what it spent in 2002. The Democratic Senatorial Campaign Committee, for its part, spent $18 million, an 18-fold increase.

Although political parties have a constitutional right to make unlimited independent expenditures on behalf of their candidates, almost everyone agrees that it is an artificial undertaking. Parties exist to promote candidates and the political philosophies they espouse. Allowing political parties to speak to voters, but only apart from their candidates, is contrary to the institutional nature of the parties themselves. Removing the coordinated expenditure limits would allow the parties and candidates to jointly tailor their advertising messages as they see fit. The parties also would likely cease making independent expenditures.

In addition, political scientists have repeatedly found that political parties invest more resources in challenger and open-seat Congressional races than do other kinds of entities, such as political action committees, which tend to favor incumbents. If the limits on coordinated party expenditures were lifted, both major parties would be able to increase the resources they devote to challengers and to open-seat elections, which could make Congressional races more competitive.

Finally, abolishing the limits on coordinated expenditures would potentially reduce the importance of soft-money spending by outside 527 organizations. If the Democratic and Republican parties could each legally spend as much hard money as they wanted in targeted Congressional races, in a way that’s fully coordinated and managed jointly with their candidates, it could help offset and perhaps ultimately neutralize soft-money spending by 527 groups across the political spectrum.

Given that the Bipartisan Campaign Reform Act sought to reduce the influence of soft money in federal elections, abolishing the party coordinated expenditure limits would allow Congress to build on BCRA and increase the role of hard money in federal elections. It would also end archaic spending limits that serve no rational purpose. Let’s hope that Congress takes advantage of this key opportunity to improve the campaign finance system when it considers the Pence-Wynn bill in the weeks ahead.

Michael E. Toner is vice chairman of the Federal Election Commission.

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