Finance reform falls

Broadcasters relieved as bill that could have cost them millions of ad dollars dies in the House, at least for now

Broadcasters breathed a sigh of relief last week when the House of Representatives voted against proceeding with the latest version of campaign-finance-reform legislation.

Although the bill's ultimate fate is unclear, the vote means it's not coming to the floor for debate anytime soon. That leaves the Senate version of finance reform, passed last March, dead in the water, as well.

The bill would have eliminated unlimited corporate and union contributions to national party coffers—so-called soft money—and could have cost TV stations hundreds of millions of dollars in lost ad revenue. In 1999 and 2000, politicians spent between $800 million and $1 billion running political TV ads. Of that, says campaign-finance-reform advocate Norm Ornstein, of the American Enterprise Institute, approximately $173 million in soft money was spent by the political parties on "sham" issue ads, which are not allowed overtly to support a candidate but often do.

The campaign-reform package pushed by Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.) and by Reps. Christopher Shays (R-Conn.) and Marty Meehan (D-Mass.) would have eliminated all soft money from federal politics, meaning that the parties would have had to rely largely on donations from individuals to fund campaigns. The bill would have increased limits on contributions from individuals, but it is much harder to collect $10,000 and $20,000 checks from thousands of individual donors than several $1 million checks from huge corporations.

That said, the parties still could use those individual contributions, known as "hard money," to fund issue ads, making it unclear how much money campaign-finance reform would take out of politics. "With the increase in hard limits, I could make the argument that it wouldn't make that much difference in how much money is available," says Paul Taylor, executive director of the Alliance for Better Campaigns.

Increasing the individual contribution limit may have meant even more money would be available to spend on political ads, say reform advocates like Ornstein and Taylor, unless a provision sponsored by Sen. Robert Torricelli (D-N.J.) stayed in the bill. His amendment requires broadcasters, cable and DBS providers to give politicians the lowest rate any advertiser had paid for a specific time slot in the preceding 180 days. For example, it's much cheaper to buy an ad in July, when television viewership is low, than in October, when viewership is much higher.

Broadcasters had been lobbying furiously against the amendment all summer and particularly in the last two weeks—with local broadcasters visiting their representatives at home and in Washington and inundating them with telephone calls.

Still, broadcasters were caught off guard late last Wednesday night, when the House Rules Committee elected to keep the Torricelli amendment in the core bill. Sources say House and Senate leadership decided to leave the provision in the bill because they thought it would help persuade fence-sitters to vote against the package. But it's also feasible, sources said, that House and Senate leadership wanted to keep the amendment in the bill because they like the idea of voting themselves a big discount on ad time.

Specifically, sources say that Senate Minority Leader Trent Lott (R-Miss.) called House Speaker Dennis Hastert (R-Ill.) last Wednesday night and asked him to retain the Torricelli amendment.

"If that's their strategy, that's a little like Russian roulette," says Ken Johnson, Tauzin's spokesman.

Luckily for broadcasters, the chamber came up empty. House Democrats, upset at what they viewed as the Republican leadership's successful attempt to stack the deck against campaign-finance reform, voted down the rule 228-203, and the debate never even had a chance to begin in the House.