Bradley A. Smith*

(This article is adapted from Professor Smith's testimony before the House Judiciary Subcommittee on the Constitution on February 27, 1997.)

Congress is currently considering numerous bills to reform campaign finance by placing new limits on speech. The most prominent are the McCain-Feingold bill in the Senate (S25) and the Shays-Meehan bill in the House (H493). It appears that we will be hearing a great deal about these proposals in the months ahead.

Before discussing what's wrong with these latest assaults on the First Amendment and the health of our political system, it is important to briefly remind ourselves that, for most of this country's history, the funding of political campaigns was almost totally unregulated. Indeed, it was not until the 1974 Amendments to the Federal Elections Campaign Act (FECA) that the federal government passed a campaign finance law with any serious enforcement mechanism. And it was also this law which, for the first time, gave us both contribution limits and, as a necessary accessory to those limits, the strange doctrines of independent expenditures and express advocacy. The 1974 Amendments threw a web of regulation, with an accompanying enforcement bureaucracy - the FEC - over American politics.

The stated goals of the 1974 FECA Amendments were to lower the cost of campaigning, reduce the influence of so-called "special interests," open up the political system to change, and "restore confidence in government." So what has actually happened in the twenty years since the 1974 Amendments took effect? Well, campaign spending has increased by more than 350 percent; PAC contributions have increased by more than 800 percent; House incumbents, who had previously outspent challengers by approximately 1.5 to 1, now outspend challengers by nearly 4 to 1; incumbent reelection rates have risen to record high levels, spurring the demand for term limits; and public confidence in government has fallen to record lows.

Clearly, the 1974 FECA Amendments have been a dismal failure. Yet the response of the reformers - notably Common Cause, the interest group most responsible for the 1974 Amendments, and today the number one cheerleader behind McCain-Feingold/Shays-Meehan - is to argue that we need more regulation, more limits, and more bureaucracy. Indeed, some (including House Minority Leader Gephardt) now claim that because earlier regulation has failed, we not only need still more regulation, but we need to amend the First Amendment to allow government to regulate political speech and activity. I would suggest, however, that when an approach has failed so clearly, so dismally, with such negative consequences, over a period of twenty years, it is time to consider a whole new approach. It is time not for more regulation, or for more efforts at "loophole" plugging, which is the approach taken by the leading House and Senate proposals. Rather, it is time to deregulate American politics.

In my opinion, large parts of Shays-Meehan and McCain-Feingold are unconstitutional. The so-called "voluntary" spending limits of the bills are in fact punitive and coercive, and amount to an unconstitutional condition leveled on the constitutional right to free speech. That portion of McCain-Feingold abolishing PACs is unconstitutional, as even its supporters seem to recognize. If one person can spend $1,000 on bumper stickers, it is inconceivable that two people cannot join together to spend $1,000 on bumper stickers.

The Senate bill's limitations on out-of-district contributions are probably unconstitutional. There is no reason why an out-of-district contribution is more "corrupting" than an in-district contribution. Thus, there is no compelling government interest to justify the ban on political speech.

But where Shays-Meehan and McCain-Feingold are most at odds with the Constitution and sound policy is in their efforts to silence political groups engaged in issue advocacy. Indeed, this question of "issue advocacy" versus "express advocacy, " which has aroused the ire of those who would regulate political speech, is a prime example of the danger of the FECA's attempt to regulate politics to produce a desired result. As Congressional Quarterly has noted, in recent years litigation has become a major campaign tactic. Thus we have Republicans filing complaints against the AFL-CIO, and the Democrats filing complaints against the Christian Coalition, U.S. Term Limits, Americans for Tax Reform, and the Christian Action Network, to name just a few recent complaints.

In each case, the complaints amount to a blatant effort to silence political advocacy by these groups. None of these groups engaged in any nefarious activities, such as vote fraud or bribery. Rather, their alleged infractions amounted to what might be called the crime of "committing politics." That is to say, the groups involved were trying to persuade the American people that either their positions were right, or someone else's were wrong. It is true that incumbent officeholders do not like being attacked for their stands on issues - particularly when they view those attacks as shameless demagoguery. However, the robust discussion of issues is wholly in line with both the First Amendment and the American tradition of political participation. That opposing political interests can invoke the powers of a government bureaucracy in an effort to silence these voices is, I would suggest, a much more serious blight on our system than the alleged effects of campaign contributions.

Of course, the FEC's concern over "express advocacy" and independent expenditures is all part of a larger effort to plug "loopholes" in the disastrous system of contribution and spending limits enacted in 1974. The only reason anyone cares about "express advocacy" is the fear that, absent such a regulation, groups will spend money to try to affect federal elections, and in doing so will exceed the contribution limits of the FECA. I have written and commented at length on the undemocratic and deleterious effects that these limits have had on American politics. See, e.g., Bradley A. Smith, Faulty Assumptions and Undemocratic Consequences of Campaign Finance Reform, 105 Yale L. J. 1049 (1996); Bradley A. Smith, Testimony before Committee on Rules and Administration, United States Senate, February 1, 1996; Bradley A. Smith, Campaign Finance - Deformed, Wall Street Journal, Oct. 6, 1995.

In short, these limits have entrenched incumbents, burdened grassroots political activity, limited the number and type of candidates, and have had the perverse effect of increasing the incentives, both for campaign contributors to seek influence rather than electoral success, and for office holders to reward financial patrons. They have also increased the power of unelected elites, most notably the media. The efforts to drive money from politics have grotesquely distorted our political system. The reason is simple and obvious: efforts to limit political participation not only run afoul of the Constitution, but they are like efforts to stop the flow of a river - one way or another, the water will pass, diverting course as necessary to do so. So long as the federal government spends over $1 trillion each year and regulates virtually every phase of the economy (not to mention many non-economic activities), Americans will seek to persuade their fellow citizens to elect their favored candidates. In modern society, this political communication and participation requires the expenditure of money.

Deregulation of campaign finance, not added regulation, is the proper course of action. The FECA $1,000 limit on individual campaign contributions should be abolished entirely, or at least raised to a realistic figure, in order to reduce the need for candidates to rely on independent expenditures. (The $1,000 limit, in existence since 1974, has never been adjusted for inflation. Had it been, it would be approximately $3,500 today. This is the minimum to which the contribution limit should be raised: $5,000, $10,000, or complete removal of the cap would be preferable.)

All caps on political party giving should be removed. Donations from a party to its own candidates are not "corrupting." Moreover, since last year's Supreme Court decision in Colorado Republican Federal Campaign Committee v. Federal Election Commission, 116 S.Ct. 2309 (1996), parties may spend unlimited amounts in support of their candidates, but only independently of the candidates campaign. Driving a wedge between parties and candidates is not only bad law - it is exceedingly poor public policy.

Disclosure of political expenditures meets any public need to know the source of financing. However, even here we must be cautious, as disclosure rules can have a chilling effect on speech and may be constitutionally limited. McIntyre v. Ohio Board of Elections, 115 S.Ct. 1511 (1995). Disclosure rules governing independent expenditures should be limited, therefore, to groups that engage in substantial activity, spending over $50,000 in an election cycle. Electronic filing and mandatory FEC posting of reports on the Internet would help to insure an informed public. These are the types of sensible, constitutional reforms Congress should consider - not the unconstitutional Shays-Meehan bill or the foolish drive to repeal the First Amendment.

In recent years, it has become increasingly difficult to discuss meaningful campaign finance reform. This is because both public and congressional opinion has become trapped in a box. This box is the conscious creation of groups such as Common Cause, which for 25 years have worked tirelessly to convince the American public that the Members of Congress are corrupt bribe-takers, and that the public itself consists of innocent dupes incapable of making intelligent voting decisions based on the information presented to them. By constantly drawing simplistic correlations to financial support and voting records, and through the conflation of the issue of campaign finance reform with other issues of voter concern - such as lobby reform, negative campaigning, and legislative gridlock - these groups have purposely attempted to create a climate of public opinion in which certain core assumptions are not to be challenged. These core assumptions are that political advocacy must be heavily regulated; political contributions - and ultimately, political spending - limited; and all possible "loopholes" plugged. However, the heavy regulatory regime which these "reformers" have placed over campaign activity is, in fact, a major contributing factor to the very problems that have created such public disgust with the campaign finance system, and with Congress in general.

Now is the time to get out of the box. We must not plunge ahead, sacrificing our First Amendment freedoms. Congress must realize that Shays-Meehan style "reforms," which are based on the erroneous assumption that Americans should not spend money on political affairs, cut off grassroots involvement and decrease the flow of information to voters. The regulatory approach enacted in 1974 has had unintended, negative consequences that have only increased voter cynicism. The House should reject simplistic proposals such as Shays-Meehan, or efforts to amend the Constitution to destroy the right to free political speech, and move generally to deregulate political speech. It ought not be a crime to "commit politics" in America.

*Bradley A. Smith is Associate Professor of Law at Capital University Law School in Columbus, Ohio, and an Adjunct Scholar at the Cato Institute.