October 15, 1997
Campaign Finance Confusion
by
Charles W. Baird0
Last Tuesday, October 7, the US Senate, at least temporarily, killed the popular campaign finance bill known as McCain-Feingold. By a vote of 51-48, the senators failed to invoke cloture (cutting off debate and allowing a vote) on an amendment by Majority Leader Trent Lott. Then, by a vote of 52-47, they failed to invoke cloture on the basic bill. (Cloture requires 60 votes in favor.) All 45 Democrats and three Republicans were opposed to cloture on the amendment, and all 45 Democrats and seven Republicans were in favor of cloture on the basic bill. Lott then confidently asserted that campaign finance reform was dead, at least for now.
Opponents of the Lott amendment labeled it a "poison pill" for campaign finance reform. It would have required labor unions to get annual written permission from their members before they could spend any dues money on politics. Inasmuch as unions are a primary source of financial and in-kind campaign contributions to Democrats (in 1996 the sum came to over $400 million), and the Lott amendment was popular with the electorate, there was no way the Democrat senators would allow an up-or-down vote on the Lott amendment.
The McCain-Feingold bill would eliminate so-called "soft money" contributions. These are funds that are supposed to be used for party building and voter participation efforts rather than supporting or opposing specific candidates or ballot initiatives. The 1996 presidential and congressional contests revealed that both parties were guilty of widespread misdirection of soft money into individual campaigns. Inasmuch as Republicans have always been better at raising soft money than Democrats, and McCain-Feingold was very popular with the electorate, there was no way most Republican senators would allow an up-or-down vote on the bill.
The Democrats and the Republicans then tried to blame each other for "killing campaign finance reform."
In truth, the only reason many of the 45 Democrat senators publicly supported McCain-Feingold was that they realized the bill could never get a majority vote in the Senate. The existing system serves incumbents of both parties very well; therefore, most incumbents want to maintain the status quo. Voters, however, want change. This provided an excellent opportunity for many incumbents, mostly Democrats, disingenuously to appear to agree with the electorate.
On the other hand, while most Republican senators were willing publicly to declare their opposition to McCain-Feingold, they sought refuge in the claim that without the Lott amendment the McCain-Feingold bill was not true campaign finance reform. Without the Lott amendment, they asserted, the McCain-Feingold bill amounts to unilateral disarmament by the Republicans. In my view, even the Lott amendment is not sufficient to force the unions to limit their political spending to voluntary contributions from workers.
There is much confusion regarding this union dues issue. In 1988 the US Supreme Court ruled in the Beck case that no worker could be forced to pay union dues that are used for political purposes. Even in the twenty-nine states that permit unions to force workers to pay unions for the right to work, all workers have the option of resigning their union membership and paying only that portion of ordinary dues that is used for collective bargaining, contract administration, and grievance procedures. (In Beck that amounted to only 21 percent of ordinary dues.) Supreme Court decisions do not enforce themselves, and the Clinton administration has refused to enforce Beck. Senators McCain and Feingold claim that their bill would codify Beck, so even Clinton's Justice and Labor Departments would have to enforce it.
The problem with their alleged codification is that it is feckless. It almost completely preserves the Beck status quo. Workers would still have to resign their union membership and individually request that the unions stop taking political money from them. The unions would still effectively be free to decide for themselves the percentage dues reductions those who resign would get. (They usually grant less than 20 percent, while under Beck they should grant well over 50 percent.) Individual workers who wished to contest the unions' decisions would still have to bear heavy costs of litigation to do so. This would continue to be an effective barrier to most workers. Since even workers who resign from unions are forced into having the unions represent them, they are routinely forced into a Hobson's choice between a small dues reduction and, through resignation, losing all voice in union affairs.
The only way that McCain-Feingold may change the Beck status quo is that more workers would realize that they have the option of resigning from the unions and becoming partial-dues payers. Abetted by the Clinton Administration, unions now try to hide that fact (see last month's column). Under McCain-Feingold that would be much more difficult to do.
The Lott amendment would require the unions to get annual written permission from their members to use any of their dues money for politics. This means that all union members would have an annual reminder of their Beck rights. That might even encourage more union members to resign. But the Lott amendment does nothing to solve the problem of the unions effectively deciding the amounts of the dues reductions for themselves. That problem could be addressed by letting each worker (whether member or not) specify the amount of money he or she is willing to give to the union for political purposes, and limiting the unions' political expenditures to that sum. But the Lott amendment doesn't do that.
The only effective way to get forced union dues out of politics is to prohibit unions from collecting any money from workers other than their voluntary members. If all workers were free to resign their union membership and abstain from paying any money to unions, and if unions were forced annually to tell workers they have that option, it would not be unreasonable to assume that those who remain as members implicitly approve of how the unions spend their dues. Workers would then have a clear choice between a 100 percent dues reduction and, if they didn't resign, allowing the unions to spend as much dues money as they want on politics. All the dead-weight losses (costs) of litigation concerning appropriate dues reduction could be avoided.
However, in all of the furor over this issue, almost everyone seems to have missed the most fundamental point of all: The only reason anyone -- any union, any corporation, any interest group -- is eager to make campaign contributions directly or indirectly to politicians, is that those politicians have power to hand out favors to the s. The original campaign finance reform law was passed in 1974 in response to the Watergate follies of Richard Nixon and his cronies. For example, people were shocked, shocked, that organized dairy interests made huge, clandestine contributions to Nixon's reelection effort. No one, it appears, stopped to consider that the reason why those donations (bribes) were made was because the US Department of Agriculture had control over dairy prices and dairy production. If the federal government had no such power, those bribes would never have been offered, much less accepted.
No matter what kind of campaign finance reform law is passed, political entrepreneurs will find their ways around it. Indeed, the whole concept of soft money emerged in response to the 1974 restrictions of direct campaign contributions. If, as the McCain-Feingold bill would do, soft money is banned, some other subterfuge will emerge. The only way to eliminate bribery of politicians and government bureaucrats is to take away their power to hand out favors.
If the federal government were constrained to the few powers explicitly granted to it by the US Constitution, the bribery would cease. To paraphrase Jefferson, a government that is "bound down by the chains of the constitution" would not be worth bribing. As an economist would put it, to eliminate the supply of bribes it is necessary to eliminate the demand for them.