House and Senate take different approaches to campaign finance

Although a showdown is unlikely before the July 4 recess, House Administration Committee Chairman Bob Ney (R-Ohio) was scheduled this morning to hold his first campaign finance reform hearing of this Congress.

Reps. Christopher Shays (R-Conn.), Marty Meehan (D-Mass.), Mike Pence (R-Ind.) and Albert Wynn (D-Md.) were set to testify about their respective bills.

Meanwhile, the Senate Rules Committee last week postponed its own markup on the 527 Reform Act introduced by Sen. John McCain (R-Ariz.), which was initially scheduled to be held this morning.

“There are some differences,” Ney said about the approach of his committee to that of Senate Rules, adding that “we’re taking a comprehensive look” at reforms.

The House and Senate both are trying to limit the political influence of 527s, tax-exempt political organizations that are not required to register with the Federal Election Commission (FEC). These groups, named for their classification in the tax code, spent millions of dollars on advertising and get-out-the-vote drives during the last election cycle on both sides of the aisle.

The McCain bill, introduced in the House by Shays and Meehan, would require 527s created in support of federal candidates to register as political organizations with the FEC and therefore comply with federal campaign finance laws. The bill would also establish donation and spending limits on most 527s with annual receipts in excess of $25,000.

The Pence-Wynn bill, in contrast, would not impose any new regulations on 527s. Rather, their bill, the 527 Fairness Act, seeks to reduce the influence of these organizations by removing many of the individual donation limits imposed on federal and state political parties by the 2002 Bipartisan Campaign Reform Act (BCRA) and removing the current spending limits for parties and their respective campaign committees.

The goal of the Pence-Wynn bill is to “lift” the parties rather than “pushing down” the 527s, according to aides.

BCRA critics argued at the time of its passage that the law would curtail the influence of national political parties and open the door to unaligned political action groups.

“What we seek is not to reform 527s,” Pence said at a March press conference to introduce his bill. “We seek fairness between 527s and the political parties, individuals and organizations that have played such a vital role in sustaining the vitality of our political life throughout American history.”

Meehan and Shays — who, along with McCain and Sen. Russ Feingold (D-Wis.), were the key sponsors of the BCRA — have argued that campaign finance reform is moving in the right direction and that the new rules they have proposed would help fine-tune the current system.

Despite the new regulations, both parties added more than a million new donors to their rolls during the last election cycle and raised more hard money than either had previously collected in hard and soft money combined, Meehan argued during a February press conference introducing his bill.

On the eve of its first hearing, Ney said it was far too early to tell the direction his committee would take with regard to campaign finance reform, but he called the Pence-Wynn bill “a great start.”

He said the committee would most likely draw up its own recommendations after the members had heard from all sides in this debate.

“I don’t have a set direction,” Ney said. “I want to be able to sift out what is the right public policy.”

Ney said that he has not yet discussed the issue with Senate Rules Committee Chairman Trent Lott (R-Miss.), but that he expected them to sit down for discussions once Lott’s committee had voted on the McCain package and Ney himself had had a chance to sound out members of his committee, as well as House leadership.

“We see a stark difference at this point in how the House and the Senate are dealing with this,” said Larry Noble, the executive director of the Center for Responsive Politics, a watchdog group. “In the House they are dealing with an effort by some members to roll back [BCRA].”

“It’s going to be an interesting battle in the House,” Noble said. “There are a number of people in the House who see [today’s committee hearing] as an opportunity to undermine the Senate.”

The Senate is widely expected to use McCain’s bill as a template for 527 reform, although some of the original opponents of the 2002 campaign finance reform law, such as Sen. Mitch McConnell (R-Ky.), could offer a number of amendments to change the legislation.

Because House leadership has not yet weighed in on the issue, it remains too early to gauge whether the House will favor 527 reform or more sweeping change, Noble said, but “it sets up the real question of whether any legislation” will come off the Hill.

In addition, the issue does not split evenly down party lines. Both House bills have bipartisan co-sponsorship, and Wynn sent a “Dear Colleague” letter to fellow House Democrats at the end of March.

It was also too early to tell how K Street would come down. “The coalitions have not yet jelled behind either of these bills,” Ney said.