Commentary

Shelter in Reform

With the Republican Party beset by scandals and political setbacks of various kinds, Representative Chris Shays, a Republican from the moderate Fourth District of Connecticut, might well expect to be swept out in a Democratic tide next month. In 2004, John Kerry got 52 percent of the district’s vote, while Mr. Shays’s own opponent that year, Diane Farrell, received 48 percent.

If Mr. Shays survives his November rematch against Ms. Farrell, he will owe his political life to a moderate voting record, independence from the Republican leadership, pork spending and, perhaps most important, the McCain-Feingold campaign finance law, which he co-sponsored and championed in the House of Representatives.

Before McCain-Feingold, vulnerable incumbents like Mr. Shays faced two significant dangers to their re-election: the first was so-called “soft money,” the unregulated funds allowed for party building. Soft money, ostensibly intended to nurture party grassroots, frequently ended up financing party attack ads in hotly contested districts like the Fourth. In 2002, for example, the national parties channeled a total of more than $3 million in soft money into television advertising directed at voters in one such district in Pennsylvania.

The second danger was embodied by unaffiliated but essentially partisan outside groups, often tied to labor unions, business interests or special-interest groups focused on issues like the environment, guns or abortion. These groups also were willing and able to finance ads criticizing sitting members of Congress.

McCain-Feingold effectively eliminated both threats. The law virtually prohibited soft money fund-raising and prevented unions and corporations alike from paying for attack ads during the 60 days before an election — in other words, the time during which most voters begin paying attention. Mr. Shays, in trouble now, would almost certainly face defeat without these McCain-Feingold prohibitions on spending.

Diane Farrell, in contrast, would probably be on her way to victory had McCain-Feingold not become law. From 1998 to 2002, the national Democratic Party raised as much soft money as the Republicans. Labor unions and other groups affiliated with the Democrats were well financed and active in campaigns. Without McCain-Feingold, both the national party and the affiliated groups would have ample resources to attack Mr. Shays and support Ms. Farrell.

Under McCain-Feingold, however, the Republican National Committee is expected to spend five times more than its Democratic counterpart While the two parties’ Congressional campaign committees have raised similar amounts, the Republicans’ overall superiority in fund-raising gives them a distinct advantage. Ms. Farrell may win in spite of it, but other Democratic challengers who lose tight races will have a legitimate claim that McCain-Feingold contributed to their defeat.

The law undermines Democrats in more subtle ways, as well. In 2004, Democratic partisans circumvented the ban on party fund-raising by exploiting a loophole in the law that enabled groups, called 527’s after the applicable section of the tax code, to raise and spend several hundred million dollars. Yet these 527’s were not part of the Democratic Party; they could not legally coordinate with party leaders or committees.

Consequently, the Democrats couldn’t incorporate 527 fund-raising and spending into their 2004 strategy and the party became less a single-minded organization seeking electoral victory and more an assembly of groups pursuing similar aims in disparate ways. The Democrats did achieve a record turnout in 2004, but the highly organized Republican Party (which largely avoided 527’s) did even better by integrating their strategy with their abundant party funds.

Chris Shays may face some opposition from groups unaffiliated with the Democratic Party. But such efforts will probably prove less effective than an integrated Democratic attack financed by soft money.

McCain-Feingold has also pitted current Democrats’ hopes against their long-term aspirations. Howard Dean, chairman of the Democratic National Committee, and Rahm Emanuel, the chairman of the Democratic Congressional Campaign Committee, have fought bitterly over the allocation of party resources.

Mr. Dean wants to build up the party throughout the nation, branching out in states where the Democrats are now weak. Mr. Emanuel argues that the future is now, and that Democrats should spend their money to win a Congressional majority in November. Mr. Dean appears to have won the battle, perhaps at the cost of dimming Democratic prospects this year. If party soft money still existed, however, the Democrats would probably have had sufficient resources to finance both their 2006 effort and their party building for the future.

More than 90 percent of Democrats in Congress voted for McCain-Feingold in 2002. That’s not surprising. Democratic activists support campaign finance reform without much thought about its electoral consequences. But at the time, Democratic leaders like Tom Daschle worried that the law, especially the soft money ban, would particularly hurt Democrats. Now we see why. If Chris Shays and other vulnerable Republicans return to Congress in January, they will have McCain-Feingold to thank.

John Samples is director of the center for representative government and author of The Fallacy of Campaign Finance Reform.