Reform That Has Really Paid Off

By Norman Ornstein and Anthony Corrado Jr.
Sunday, April 1, 2007

This week marks the fifth anniversary of the enactment of the Bipartisan Campaign Reform Act, also known as McCain-Feingold. There haven't been any birthday parties of note. Mitt Romney received tumultuous applause at the Conservative Political Action Conference last month when he called the law "ill-considered" and "harmful" and pledged to repeal it if he is elected president. Newt Gingrich, with typical understatement, described McCain-Feingold in National Review Online as "the most systematic effort to censor and repress political speech by those in power since the Federalist overreach of the 18th century." Even Fred Thompson, who voted for the measure in the Senate and worked to enact it, said recently that it hasn't worked as intended: "I'm not prepared to go there yet, but I wonder if we shouldn't just take off the limits and have full disclosure with harsh penalties for not reporting everything on the Internet immediately."

To be sure, these comments by presidential aspirants are aimed at mollifying conservative activists who despise campaign finance reform -- and at sticking it to their rival, John McCain, its godfather. But they also reflect a widespread view that BCRA did not work, that campaign reform has been a failure. But that's wrong. McCain-Feingold has worked -- even better and faster than its architects imagined.

The most striking result of McCain-Feingold has been the spectacular resurgence of political parties. Far from withering, as critics predicted they would at the time of passage and as they continue to reiterate, our parties are richer, and stronger at the grass roots. In the two elections held before BCRA, the national parties raised a total of $2.1 billion, nearly half of it in unregulated "soft money" -- six- and seven-figure donations from corporations and wealthy individuals. In the two elections since, the parties raised exactly the same amount, but all in "hard money," meaning smaller contributions from individuals and PACs. The parties had to shift their focus to the recruitment of small donors. Both have taken advantage of the Internet and other fundraising tactics to add more than a million new grass-roots supporters to their donor rolls. Small donors are now the largest source of party money.

Consider the 2006 elections. In the previous midterms, in 2002, half the money raised by the national party committees was soft money. In 2006, individual donors who each gave less than $200 were the largest source of party donations, accounting for $1 of every $3 raised. The importance of those who give $20,000 or more has greatly diminished. In 2002, these donors were responsible for 46 percent of all party money, including soft contributions. In 2006, they provided only 12 percent of party resources. In all, the parties raised $309 million from small donors, compared with $108 million from the biggest donors.

Nearly all the party soft money raised in 2002 was channeled directly into television and radio ads, most of them attacks on opponents. Only a tiny share of the ads even mentioned the party that sponsored them. A much larger share of the money raised in 2006 went to party-building, grass-roots and get-out-the-vote efforts, all signs of party-building from the bottom up.

The parties' success in raising money under BCRA has made them more important in recent elections. In 2006, the national committees spent a combined $248 million in direct support of their candidates: The Republicans spent $130 million, the Democrats $118 million. This was more than they spent in support of candidates in the 2002 elections, even with soft-money-funded "issue ads" included. The importance of party funding was particularly pronounced in key House races; in 17 of them, the parties spent more than the candidates themselves during the general election period.

Another criticism of BCRA is that it mostly helps incumbents, a favorite point of Gingrich's. The reality is that in the two elections before BCRA, the number of House members defeated at the polls in November was six and eight, respectively. In 2006, 22 House incumbents went down to defeat, along with six senators. Critics have also lambasted the law's "sham issue ad" provisions that ban the use of corporate funds or union dues for broadcast ads targeting candidates close to an election. But studies of campaign-related ads in 2004 and 2006 showed that the airwaves remained filled with ads sponsored by outside groups or individuals, who were free to use money from PACs and individuals to run any and all ads they wished.

As members of a campaign finance working group in the late 1990s, we both helped to structure BCRA. We saw its provisions as narrowly targeted and incremental, not revolutionary. We thought the law would produce a flowering of grass-roots party activity, a resurgence of small donors and a reduction in the sale of access to elected officials in return for campaign funds -- and a decrease in the shakedowns of donors that this practice induced. But we thought it would take several election cycles for the changes to take root. Instead this happened immediately.

The critics will continue to ignore the numbers and play to the ideologues. We will open up a fine vintage wine to celebrate five years of a more vibrant and fair campaign process.

Norman Ornstein is a resident scholar at the American Enterprise Institute. Anthony Corrado Jr. is Charles A. Dana professor of government at Colby College.

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