Did Soft Money Ban Kill Political Parties? | Rules of the Game

The Supreme Court’s recent ruling to overturn limits on aggregate campaign contributions has revived a long-running debate over the demise of the nation’s political parties, and what could bring them back to life.  

In McCutcheon v. Federal Election Commission , the high court may have done the parties a favor by eliminating the $123,200 cap on what individuals may give to candidates and parties as a group in one election cycle. Parties are now free to solicit much larger checks through so-called joint fundraising committees, a type of collective account that divvies up money between parties and candidates.  

Watchdogs warn that such joint campaign funds will effectively bring back the unlimited soft money contributions to the parties that Congress banned in 2002, legislation best known as the McCain-Feingold law after its Senate authors. But conservatives hail the McCutcheon ruling as the first step toward repairing the damage that they say was done by that ban.  

That law “has succeeded in profoundly altering the state of American politics by severely weakening American political parties to the benefit of outside spending groups who may raise and spend unlimited funds in connection with federal elections,” testified election lawyers Neil Reiff, a Democrat, and Donald McGahn, a Republican, before the Senate Rules and Administration Committee last week.  

Reiff, the former deputy general counsel at the Democratic National Committee, and McGahn, a former FEC chairman, aren’t the only McCain-Feingold critics to vent their frustration with the soft money ban in recent weeks. If only Congress hadn’t outlawed soft money, the ban’s detractors imply, a host of political ills would never have come to pass.  

It’s easy to see why party organizers and advocates of campaign finance deregulation chafe at the current regime. After all, if unrestricted super PACs and non-disclosing tax-exempt groups can spend millions in elections with no limits, why can’t the parties? A wave of commentary has enumerated the parties’ salutary role promoting robust competition, and moderating partisan polarization by appealing to the voters in the center.  

But the parties’ demise goes way beyond McCain-Feingold. And eliminating the cap on “base” contributions to candidates and parties, which many conservatives now endorse, would not necessarily strengthen the parties. While the McCain-Feingold law put $591 million in soft money that the parties had raised in 2002 out of reach, they quickly made up for that loss. In the 2004 elections, the parties collected more in "hard" money subject to contribution limits — $1.5 billion — than they had in hard and soft money combined ($1.1 billion) before the ban took effect.  

Outside spending did increase — the so-called 527 groups came that came into vogue following the ban boosted their receipts to $424 million, an increase of some $273 million, according to the Campaign Finance Institute. But the big non-party spending jump didn’t come until after the 2010 Citizens United v. FEC ruling to deregulate independent campaign spending. In 2012, the first presidential race to follow that ruling, outside spending topped $1 billion.  

If the parties had really spent their unrestricted money on get-out-the-vote activities and party building before the McCain-Feingold law took effect, soft money nostalgia might be more compelling. But a parade of former and current elected officials who defended that ban in court testified that the money was spent not on grass-roots activity or state and local elections, but on high-dollar ads; in 2000, 92 percent of those ads did not even identify the parties.  

The former members of Congress testified that they “were expected to raise significant amounts of money for their party committees, were given incentives to do so, and could face sanctions if they did not.” They also detailed how party officials relied on lawmakers to net big donors and described “an inseverable link between the national political parties, their congressional fundraising committees and federal candidates.”  

That real-world account contrasts sharply with the Supreme Court’s conclusion in McCutcheon that the parties act as a “buffer” that protects lawmakers from the corrupting influence of large contributions. Soft money gave the parties plenty of money to spend on ads, but it also gave them a black eye in the form of foreign money scandals, White House coffees and Lincoln Bedroom sleepovers.  

Unrestricted money would strengthen the parties’ bottom line, but it may arguably weaken them institutionally in the long run. Parties succeed over time on the strength of their ideas, and on their ability to appeal to a broad base of voters, reflected materially in the support of small donors.  

Notes former FEC chairman Trevor Potter, who heads the Campaign Legal Center and the political activity law practice at Caplin & Drysdale: “A couple of people writing big checks leaves you a hollowed-out party structure.”  

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.