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Dim Outlook for 527 Overhaul Bills

With the public’s memories of the 2004 election and the “summer of 527s” fading, a combination of Congressional inertia, partisan calculation and deep philosophical divisions are conspiring to deflate the hopes of those who would like to see the independent political groups prohibited from spending soft money on federal elections.

In the meantime, the House has moved closer to changing some of the underlying structure of decades-old campaign finance laws in order to allow the political parties to raise more money to compete with the independent political groups. But their momentum may be halted abruptly in the Senate.

The situation appeared dramatically different at the beginning of this session, when a bipartisan group of Senators talked about “reining in” 527s, named after the section of the tax code under which they operate, and subjecting them to the same restrictions as other federal political committees.

But the House’s divergent approach, along with a crowded Senate calendar and resistance from Democrats on both sides of the Capitol, make it less likely that any campaign finance legislation will emerge from Congress this year.

As appropriations season warms up with the summer heat and the Senate still consumed with an energy bill and the looming possibility of a Supreme Court confirmation debate, the floor time to pass campaign finance legislation — even if that’s what the Senate leadership wanted to do — is waning. And most observers believe any change would need to be done before fall to have the maximum impact on the 2006 election.

The House is expected to take up a campaign finance bill sometime before the August recess. That legislation, sponsored by Reps. Albert Wynn (D-Md.) and Mike Pence (R-Ind.), seeks to undo many of the post-Watergate changes that have served as the structural underpinning of campaign finance laws for the past three decades. Its sponsors believe that robust political parties able to raise larger sums of hard money will effectively reduce the influence of 527s.

By sending the Pence-Wynn bill sailing through committee to the House floor, where it currently awaits action, the House GOP leadership appears to be trying to do more than just lift the aggregate contribution and coordinated spending limits — two restrictions at the heart of the current campaign finance structure. According to Pence, the bill represents something else: “The House being heard on campaign finance reform.”

“Arguably, the last time we just heard from the Senate” and passed its bill, Pence said at a press conference last month, referring to the 2002 Bipartisan Campaign Reform Act. “This time we send campaign finance reform to the Senate.”

BCRA was written in the Senate and its sponsors strategically avoided a conference committee with the House, fearing the bill would be laden with “poison pills.” The House, squeezed politically, passed the measure with some Republican but mostly Democratic support.

It’s not at all clear the Senate is listening.

Sources familiar with Senate Majority Leader Bill Frist’s (R-Tenn.) inner circle say he has no plans to clear floor time for the 527 bill this session. Multiple calls to his office seeking comment were not returned.

Nonetheless, the House is ready to move. Republican sources indicated that the House GOP leadership plans to whip on the Pence-Wynn bill and bring it up in the next few weeks.

The House plans to pass it and then deal with getting it through the Senate, a House GOP leadership source said. “We have to stake out our farthest and strongest position possible before any kind of movement would happen.”

Yet if there is no Senate action, there will be no conference committee. And all indications are that many Senate Democrats would prefer to do nothing.

Senate Minority Leader Harry Reid (D-Nev.) was circumspect when asked what he would like to see done on the issue this year. Instead, he reflected on the chances of the 527 bill moving in the Senate this session.

“The problem we have with the 527 bill and a lot of other things is the two-month-long holdup on the judges,” Reid said Tuesday. “I don’t know what will be done. I don’t know if we have time left.”

Democrats in both chambers generally have been less than enthusiastic about any effort to curtail 527s. The groups spent upwards of a half billion dollars in soft money on the last election, much of it to benefit Democratic candidates.

Sen. Dick Durbin (D-Ill.) articulated some of that reticence this week. He noted that the bill offered by Sens. John McCain (R-Ariz.) and Russ Feingold (D-Wis.) left the Senate Rules and Administration Committee “in such a turmoil” and predicted that legislation to curtail the soft-money efforts of 527s would be met with resistance.

“It would have some problems on the Senate floor. Many people think it went way too far and want to be careful not to destroy opportunities for public discourse,” Durbin added.

The turmoil to which Durbin referred was a series of amendments that weakened the bill, perhaps critically, in the eyes of its sponsors.

Under those auspices of maintaining grass-roots voter participation, Sen. Charles Schumer (D-N.Y.) removed his name from the bill he had originally co-sponsored. He then successfully amended it to remove restrictions on the ability of 527s to use soft money to fund voter-registration and mobilization efforts, effectively gutting half the bill. As chairman of the Democratic Senatorial Campaign Committee, Schumer’s original support for the legislation was key to convincing wavering Democrats that restricting 527s was the right thing to do.

Further evidencing Democrats’ reluctance to touch the 527 issue, last month the House minority leadership sent a “Dear Colleague” letter to Democratic Caucus members imploring them not to support Wynn and Pence’s measure. But nowhere in that letter did House Democratic leaders put forth an alternative or lend support to the efforts of another lawmaker in the Caucus, Rep. Marty Meehan (D), who helped draft legislation to close the 527 “loophole.” His measure is co-sponsored by Rep. Christopher Shays (R-Conn.).

Democrats counter that Republicans’ efforts to move Pence-Wynn, along with amendments to the same effect added on the Senate bill, are nothing more than a GOP attempt to leverage the outrage over 527s to pass legislation maximizing their political advantage. Democratic campaign lawyer Bob Bauer has said as much on his Web log, which is widely read among campaign finance experts and political operatives.

“The package has been designed so that it is attractive to partisan Republican interests,” Bauer wrote. “It is not deregulation, but a partial deregulation: a picking and choosing among various reforms to produce the combination that is politically most advantageous.”

Wynn, a Democrat, of course disagrees.

Privately, proponents of the Pence-Wynn measure in the House believe they have the votes. But in order to pass the measure, the GOP leadership would likely need to sway many of the 28 House Republicans who voted for BCRA, a prospect reform-oriented groups are working hard to avoid. In addition, Wynn would need to convince anywhere from a handful to a dozen or more members of the Congressional Black Caucus, many of whom voted for BCRA and now feel burned by it, that the bill is their best chance to expand their ranks. The Maryland Democrat has so far been coy on the results of that effort, however.

“It’s hard to say,” Wynn said recently. “There’s a lot of opposition on the Democratic side.”

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