The Real Winner in the Campaign Finance Case

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Earlier this year, Congress passed the most sweeping regulation of campaign finance in 30 years. In recent weeks, a three-judge federal court passed judgment on the constitutionality of the law, known generally as McCain-Feingold (search). Supporters and opponents of the law rushed to claim victory at the court's ruling. But the real winner has not been heard from: incumbent members of Congress. The people who voted for the law must be privately celebrating their victory.

Why will incumbents benefit from the court ruling? Our elections are largely fought out over television and radio. Political advertising, especially ads critical of candidates, provides citizens with the information they need to make a reasoned choice and with the motivation to go to the polls. Members of Congress often complain about their opponents' ads deeming them false or impolite. No doubt some are. On the whole, however, tough critical ads give voters what they need to make a choice.

McCain-Feingold took aim at election ads in two ways. First, it banned soft money fund raising by national political leaders. Over 20 years ago, Congress permitted the political parties to raise funds in unlimited sums (so-called "soft money") for party-building activities, including get out the vote efforts. In the mid-1990s, the parties also started spending soft money on political ads, many of which targeted vulnerable incumbents. The ban on party soft money should surprise no one.

The law struck at political ads in a second way. The political parties were not the only sponsors of hard-hitting TV ads. Many interest groups, some tied to the parties, others independent, began raising money to buy ads on the issues, as is their right under the First Amendment (search). Such fund raising was free of federal contribution limits because it dealt with issues, not with expressly advocating the election or defeat of a candidate. (Under existing Supreme Court doctrine, only ads using words like "vote for" or "vote against" fall under election law and its contribution limits).

Many members of Congress thought these issue ads were actually advocating their defeat. They decided to expand the regulatory reach of the federal government over free speech. McCain-Feingold mandated that ads merely "referring" to a candidate for federal office must be paid for by funds raised within federal contribution limits. For example, the $9 million contribution to the NAACP (search) in 2000 to run issue ads is now illegal. Redefined this way, the number of ads critical of incumbents would go down because raising money to fund them would have to be done in small sums and thereby would become much harder to do.

This background throws new light on last week's court decision. The court did invalidate part of the soft money ban and would allow parties to raise and spend soft money on party building activities and voter registration. However, the court upheld McCain-Feingold's ban on the parties using soft money to pay for ads that refer to a candidate for federal office. Vulnerable incumbents have less to fear from the other party's advertising in 2004.

What about the issue ads run by interest groups? Here again the court came down on the side of incumbents. Groups running ads that "promote or support" or "attack or oppose" a candidate for office must raise the money under federal contribution limits. Under current law, such ads would be treated as issue ads and be free of regulation. The court has thus expanded the sweep of federal regulation of interest group speech during elections and made it harder to criticize a candidate for office, especially candidates already in office.

The court's decision makes little sense. It's not as if incumbents are an endangered species. For the last three elections, more than 98 percent of incumbents seeking re-election to the U.S. House of Representatives have won. Our republic needs more competition at the ballot box, not less. The court's latest decision will make congressional incumbents more comfortable and entrenched. We can only hope that the Supreme Court — the next and final stop for the law — fosters competition by striking down McCain-Feingold's restrictions on political speech.

John Samples is director of the Center for Representative Government at the Cato Institute.