This week the Senate takes up campaign finance reform. Talk of compromise is in the air. New actors, including many in the business community, are floating fresh approaches to reform. The chief reform proponents, Sens. John McCain (R-Ariz.) and Russ Feingold (D-Wis.) have scaled back their plan to a bare-bones proposal to end soft money, signaling their desire to strike a compromise to secure at least the 60 votes needed to move the issue along. But that proposal, even sweetened with an increase in individual contribution limits, has been rejected out of hand by chief naysayer Sen. Mitch McConnell (R-Ky.).

The problems caused by the current system are becoming worse. Christy Todd Whitman's decision earlier this month not to run for the Senate from New Jersey underscores one of the disappointing realities of contemporary American politics: Money overwhelmingly has become the single most dominant factor in our political campaigns. Faced with the prospect of running against a self-financed money machine in multimillionaire Democrat Jon Corzine, Whitman found that the twin tasks of being governor and a Senate candidate were incompatible. The time spent raising money -- and the pain associated with it -- took away any appeal the Senate run would have for her.

Political handicappers now rate the chances of House and Senate candidates first and foremost by their capacity to raise the money necessary to run viable campaigns. The first criterion used to judge presidential candidates is how much money they have raised (few took Bill Bradley's campaign seriously until he showed a strong ability to raise funds; Lamar Alexander and Dan Quayle got dismissed by pundits and voters because they failed the first major fund-raising tests.)

Face it -- one of the main reasons New York Democratic Party leaders moved quickly to push Hilary Clinton into the Senate race was their belief that she, unlike the other prospects, could raise the $25 million necessary to take on Rudy Guiliani. The same impetus led New Jersey Democrats to recruit Goldman, Sachs tycoon Corzine to run. In Nevada, leading Democratic contender for the Senate seat there, Attorney General Frankie Sue Del Papa, just withdrew, citing fund-raising demands. State Democratic leaders are now banking on -- what else? -- a self-financed multimillionaire trial attorney, Ed Bernstein. All around the country, parties are seeking candidates with the money or the money-raising capacity to run, with other factors, such as experience or ability to govern, secondary. If they can't find the money, the party pros look for the next best thing -- candidates with enough notoriety that they don't need as much money to get attention (Jerry Springer, anyone?).

For many erstwhile reformers who believe that money dominates, the answer is to cut off the money, squeezing out all remaining sources of campaign funding as much as possible. That approach has helped get us into the mess we're in and only makes the self-financed millionaire candidates, professional wrestlers and the ideologically driven more prominent and powerful.

The innovative reform proposal of prominent figures in the business community, through the Committee on Economic Development (CED), does not make that mistake. The CED business leaders start with the assumption that lots of money is necessary in campaigns to enable candidates to run and to get their message across, but it should be the right kind of money.

So CED leaders propose abolishing soft money, which has become a pernicious force in politics, and at the same time increasing individual and party contribution limits, which have not been changed in a quarter century and are now worth one-third of what they were. And they propose a two-for-one matching fund for candidates who raise money in small contributions ($200 or less) as an incentive to increase the base of small donors and increase their impact while countering the leverage of the multimillionaire candidates who use their own money.

By recognizing the need for adequate resources in campaigns and finding ways to change the mix in the money game, the CED has provided a fresh approach to campaign reform that fits no ideological straitjacket. It is an obvious basis for bipartisan negotiation and compromise on this most partisan and contentious of issues.

The writer is a resident scholar at the American Enterprise Institute.