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Armageddon for the GOP? Hardly.

From the February 20, 2002 Wall Street Journal: The Shays-Meehan campaign finance reform bill might even wind up helping Republicans.

11:01 PM, Feb 21, 2002 • By FRED BARNES
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NATIONAL POLITICS will survive the Shays-Meehan campaign finance reform bill, which passed the House last week and is likely to become law soon. If it curbs money in politics at all, the effect will probably be slight. And Republicans shouldn't be alarmed despite House Speaker Dennis Hastert's claim that Shays-Meehan could produce Armageddon for them. In truth, there's a better chance the measure will aid Republicans in winning the White House, Senate, and House than impede them.

But first consider what was averted: a sweeping reform measure. In 1994, both the Senate and House approved legislation imposing partial taxpayer funding of congressional elections and campaign spending limits, banning soft money, and putting draconian limits on independent issue ads. Only a clever Senate filibuster (blocking the appointment of Senate conferees to a House-Senate conference) engineered by Senator Mitch McConnell of Kentucky kept the bill from being signed into law. It was "a total government takeover of federal elections," says McConnell, the bete noire of campaign reformers. But it died.

Shays-Meehan pales in comparison. While it bans soft, or nonregulated, money, there are large loopholes. It clamps down on issue advertising but less severely than the 1994 legislation did. And it does what reform groups such as Common Cause, the liberal lobby, most abhor. It raises to $2,000 from $1,000 the limit on hard money, which goes directly to candidates and can be spent however they please. Also, the annual ceiling on hard money donations by a single individual increases to $95,000 from $75,000. Both increases are indexed for inflation.

So at best what reformers have won is a modest victory. And on what's most important in campaign finance--hard money--they've actually lost ground. In the broad scheme of federal elections, the reform movement is still far from achieving its ultimate goal of driving out all private money and having public financing for all federal election campaigns.

Things may get worse--or better, depending on your perspective. McConnell and a team of Republican election law experts are working up a lawsuit challenging the ban on soft money and the prohibition on independent issue ads within 60 days of an election. The latter is undoubtedly an unconstitutional limit on political speech and will probably be struck down. There's also a remote chance the federal courts will rule the soft money ban is a violation of the freedom of association. If both were tossed out, the result would be victory beyond the wildest dreams of Republicans: legislation that allows more hard money and does little else.

Let's examine the four most significant parts of Shays-Meehan--hard money, soft money, loopholes, issue ads--and see how they're likely to play out. The first is hard money, the mother's milk of GOP campaigns. The fundraising numbers for 2001 tell the sad story for Democrats, though the Republican and Democratic congressional campaign committees were not that far apart in collecting soft money. House Republicans had a 5-3 edge over Democrats in soft money but raised $40 million in hard money to $16 million for Democrats. In the Senate, Republicans raised $24 million in soft money to $23 million for Democrats, but the gap in hard money was far wider, $29 million for Republicans, $14 million for Democrats.

Why the GOP edge? A lot of it has to do with the base of the parties. For Republicans, it's Main Street, professional people, the well-to-do, and those who don't benefit from government programs. They tend to donate hard money. For Democrats, their base is union members, low income people, and to a lesser extent, a growing segment of the very wealthy. The poor don't have money to give, union members give through union dues, and the wealthy are chiefly a source of soft money donations. In short, Republicans have a built-in advantage on hard money. Democratic national chairman Terry McAuliffe says he'll work to overcome it, and he's as good a fundraiser as Democrats have ever had. But Democrats have been striving for decades to match GOP success in locating steady donors of hard money and have fallen woefully short.

On soft money, however, they've gained near-parity with Republicans. Corporations often split their donations between the parties, and Democrats have exclusive sources as well, such as Hollywood and trial lawyers. The trouble is Shays-Meehan ends soft money donations to the national parties. But because of loopholes, the situation is hardly hopeless.