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Press Briefing by Special Assistant to the President for Policy Coordination Michael Waldman

May 07, 1993

The Briefing Room

11:00 A.M. EDT

MR. WALDMAN: I'm Michael Waldman. I'm Special Assistant to the President for Policy Coordination. And I was the person who headed the team working on campaign finance reform.

The package that was released today was the product of months of discussions among ourselves and with folks on Capitol Hill, designed to produce a package that was real reform, would change the system, and we believe has a good chance of passing. So we're looking forward to seeing this legislation move. And we are delighted to be working with the leadership of Congress and the members of Congress on this, as was evidenced today.

What I thought would make sense is to just quickly walk through the legislation. I think -- to walk through the legislation and what's in it and then be happy to answer questions from the aficionados about the specific provisions.

The core of this proposal is to limit campaign spending, to impose voluntary spending limits on congressional campaigns as you have right now on presidential campaigns, and is not the case in the current law. As the President said, campaign spending has risen in an almost out-of-control fashion. This is one of the things that people --

Q: Can you give us some specifics on how much --

MR. WALDMAN: Sure. Well, last year alone, overall spending on congressional campaigns rose 52 percent over 1990.

Q: From what to what?

MR. WALDMAN: Up to $600 million from about $450 million, right?

Q: On all the campaign, on all congressional?

MR. WALDMAN: House and Senate, yes. But partly that was -- that did not include presidential campaigns.

Q: So for the congressional and senate races last year $600 million was spent as opposed to how many years earlier?

MR. WALDMAN: Two years earlier about $450 million. We can get you that exactly. I mean, that's widely available.

The key to this proposal is voluntary spending limits. As the President said you cannot impose mandatory spending limits under the Constitution. These voluntary spending limits are roughly where they were in last year's legislation, adjusted for inflation. And basically, in the House, that's $600,000 in last year's base year. And in the Senate, it varies depending on the size of the state, going for general elections from $1.2 million to $5.5 million, depending on the size of the state.

And as one of the sheets points out, these spending limits are high enough to enable competitive races to give voters a real choice; are also significantly lower than was spent by quite a few of the members of Congress who are there now. I think you'll look and see that these spending limits are just about at the right place.

Candidates who comply with these spending limits will receive public benefits. The key is what the President and others talked about, candidate communication vouchers, which will open up the airwaves so that all candidates who comply with spending limits, and not just those with access to a lot of money, will be able to get their message out.

Now, these are only useable for television, radio, printing and postage. They're only useable for communication with voters. And the level of candidate communication vouchers, again, in the House is one-third of the spending limit, which was the number in last year's bill. In the Senate they've increased the amount to a total of 25 percent of the overall spending limit -- the cycle spending limit.

These are funded, as was said, by the repeal of the deductibility of lobbying expenses, which will bring in substantially more money than would be needed under any imaginable version of this plan.

Q: How much?

MR. WALDMAN: About -- accounts vary, but about $170 million a year under Treasury's estimate. And there are other -- that's using their methodology for calculating how you would collect the tax. Other people have an even higher estimate.

Q: How much did you figure the vouchers will cost?

MR. WALDMAN: It's hard to estimate, and CBO has not done the estimate yet. But one rough estimate that I've heard would be about $75 million a year.

Q: Is that what it is now -- $170 million a year?

MR. WALDMAN: I beg your pardon?

Q: Is that what it is now? Is that the level of deductibility on lobbying expenses now?

MR. WALDMAN: Because of the way that they calculate this stuff, when you take away the deductibility in the first year or two, the amount is less. But it rises to about that level in the third year, according to Treasury. I'm no expert in how this --

Q: Why would it go up when you're taking away their rights to donate money and things which are now --

MR. WALDMAN: I'm happy to report I'm not a tax expert. That's one thing I've managed to avoid being. I don't know the answer --

Q: Considering you helped draw up this package and it seems like a core issue.

MR. WALDMAN: Well, this is the estimate that Treasury has put forward and CBO and others have put forward similar estimates in other years. There's no doubt that repeal of the deductibility for lobbying expenses will bring in significant sums of money. I think it's, as taxpayers learn what they can and cannot deduct, the compliance increases over time.

Q: Let me ask that again one more time here. You're saying that the estimates of lobbying expenses are actually going to go up when you limit what you can spend for lobbying?

MR. WALDMAN: We're not limiting what you can spend. We are taking away the ability to deduct those expenditures.

Q: Right.

MR. WALDMAN: And tax experts have usually a phase-in for how they calculate the revenue coming in from these things. This was the Treasury Department tax experts who did this. So, as I say, the Congressional Budget Office and others, when they have calculated this in other years, have made the same analysis. But the bottom line is that there will be more than enough money coming in from the repeal of the deductibility to pay for opening up the airwaves and leveling the playing field without average taxpayers having to foot the bill.

The other element of this is --

Q: Excuse me just a second. Before you go on to the next element -- what you're saying then is that right now, currently, there is about $170 million that's deducted --

MR. WALDMAN: That's correct.

Q: in lobbying fees now. You're working up to the --


Q: over three years you'll be up to eliminating all of that. But that's the amount that's currently being deducted?

MR. WALDMAN: That's right. That's right.

Q: how much the vouchers would cost, given that they're indexed for inflation and the Senate went up by 5 percent from where they were last year.

MR. WALDMAN: The estimate is about $75 million a year, or it comes to --

Q: That's less than it was last year.

MR. WALDMAN: You're thinking about the cycle. I mean, it's $75 million a year, $150 million a cycle.

Q: In the cycle -- okay.


Q: Can I ask you about the spending limit? My understanding is at least on the House side that the $600,000 spending limit exempts or doesn't cover certain types of spending -- legal compliance, things like that.

MR. WALDMAN: As is the case in the presidential system now, where there is a compliance exemption, and in the Senate as well, where there's also a compliance exemption, the House, as last year's bill as well had an exemption for fundraising above the spending limit. And this will be -- these details haven't all been worked out, but my understanding as it is in the document is that that will be 10 percent -- again, with the one-third PAC limitation applied to that as well.

We have been discussing with them what the compliance exemption will be. And I believe it will be lower than it was last time. So the actual --

Q: Last time it was --

MR. WALDMAN: Twenty percent.

Q: Twenty percent.

MR. WALDMAN: Yes, and it's not going to be 20 percent this time. My understand is it will be -- you'll have to talk to them, but my understanding is it's going to five percent. So the actual spending -- the basic number is the $600,000 plus inflation, with these other things that the presidential system also has.

Q: But if you look at all spending, including these other things, the total package would be how much? Because the people in the House were saying earlier this week that total spending would reach up to about $1 million.

MR. WALDMAN: I don't think so. The only -- yes. First of all, maybe in the year 2000 or something like that with inflation. But this is -- the spending level is basically what it was in last year's bill, which was basically $600,000 with this -- the key exemption being the fundraising exemption, but lowering the exemptions in other areas. And then the built-in inflater was also in last year's bill. So this was something where we had pretty firm agreement with the House that basically it was going to be last year's bill taken forward.

Q: Are both the House and the Senate indexing for inflation or only the House?

MR. WALDMAN: I don't know about the Senate. The Senate index if for voter population, which effectively indexes for inflation because they don't have one limit. They do it by the number of people in the state.

Q: Did you address the issue of whether or not -- you've set spending limits so now it loosely parallels the presidential side. What provisions have you taken to protect against the soft money system developing to help House and Senate?

MR. WALDMAN: Maybe if I can answer that question when we get to the soft money section. Basically, the soft money language largely applies to all federal elections, so that soft money helps state candidates -- congressional candidates as well as federal candidates. Why don't I get to that when we get to --

Q: Doing that back-of-the-envelope arithmetic, if you add inflation, fundraising exemptions, the way I figure it you get up to about $750,000 in the year this becomes effective.

MR. WALDMAN: Which is less than last year's bill.

Q: Okay. Do you disagree with that arithmetic?

MR. WALDMAN: I would say a little less. It depends on -- I think you may be counting an extra year of inflation.

Q: Count four years, right?

MR. WALDMAN: It would be -- that's something that needs to be worked out because you start with `93 as a base year.

Q: That's ballpark, plus another $150,000 if you have a contested primary or --

MR. WALDMAN: Right. The number --

Q: So you could get up to $900,000 conceivably.

MR. WALDMAN: In very few cases.

Q: In some cases.

MR. WALDMAN: Yes, in very few --

Q: If you face a lot of challengers, you'll have a lot of contested primaries. Just teasing, Mike. (Laughter.)

MR. WALDMAN: It's a possibility.

Q: Let me just ask one other sort of legislative question. Technically, how's this being introduced? There's going to be bill introduced in the Senate and a leadership bill introduced in the House, which are going to be different.

MR. WALDMAN: Well, they'll be -- I hope they'll be the same on most of the key components. They'll be different on some elements in the House and Senate. Especially the rules are set for their own elections. That's as it's been in all the other years that campaign finance has been done.

Q: But the House bill is going to have a bundling exemption?

MR. WALDMAN: If you all don't mind, maybe it would be a good idea to run through it because bundling is, as the President said, the one issue where we really had to agree to disagree. Where we could not come to agreement among us and the House and Senate was on bundling.

Q: Can I just ask one more money question? Okay, so if it's only going to cost estimated at $75 million at first and you're going to bring in $170 million, does that just go in the general fund or does that get set aside to use --

MR. WALDMAN: The expectation is that there will be a basic trust fund type arrangement. So that Treasury will estimate every year how much money should be set aside for that purpose. As I say it's going to be -- the money available will be significantly more than is needed.

Q: So the excess would go into that trust fund or it would just go into the general fund?

MR. WALDMAN: It would go into the general fund. We're working out the details of how much of a cushion you leave and so on.

Let me mention one other thing because this could get confusing. One of the other things that is being done in this bill is the voluntary check-off is being increased to $5 and that also is part of how this is funded. Any changes in the presidential system obviously, I mean the presidential grant is funding out of the checkoff. And I believe it is likely that the House wants to ensure complete voluntariness. They want to have their races as well funding out of the check-off. But again, remember that the underlying revenue from the deductibility is more than enough to pay for all of those things. So it's sort of an extra layer of protection for tax payers.

Q: How much money do you expect to get out of that?

MR. WALDMAN: Well, the check-off --studies have shown that when you increase the check-off, it doesn't actually lead to a drop in people checking off, especially because $5 isn't very much money either.

Q: Like what -- like 17-percent participation now. What estimate are you using to figure out --

MR. WALDMAN: We would assume about five times 17, so whatever that comes to.

Q: Does that affect the bottom line on your taxes?

MR. WALDMAN: No. It's the same as the presidential check-off.

Q: Five times 17 -- what do you mean?

MR. WALDMAN: The operating assumption that the FEC has made over the years when these proposals have been made is that if you -- if the check-off is $1 and you raise it to $2, you don't lose 50 percent of the people.

Q: I'm looking for a figure -- if you're working with 17 percent --

MR. WALDMAN: We'll get back to you on that. It has not been something that we have costed out with complete precision because it hasn't been necessary to. But we can get back to you later today.

Q: But there will be a single check-off that will finance the presidential and the congressional races?

MR. WALDMAN: And the House races, yes.

Q: So a person who thought it was appropriate to finance presidential races would have to opt out completely if they didn't want to --

MR. WALDMAN: That's right, yes. But I'm not -- again, the experience from states that have had check-offs and raised them - - the experience that all the studies have shown is you're not going to get a big drop-off.

Q: You're saying zero fallout from $1 to $5?

MR. WALDMAN: That's what they've found. But certainly not enough to have -- it still will bring in more money.

Q: It still would have access to the check-off pool, or no?

MR. WALDMAN: No. Again, the check-off is just a way for people to vote about whether they want this spending in their name basically. But, again, the key is the underlying revenue comes from the deductibility of lobbyists provision.

Q: I understand that. But doesn't it seem like at some point you're going to run out of money on the deductibility end? I mean, they'll find ways around it or they'll --

MR. WALDMAN: Well, people cheat on their taxes, you know.

Q: They may not cheat, but they can bury it in other forms.

MR. WALDMAN: That's up to us and the revenue committees to write a law that is difficult to get around.

Q: You're assuming 100 percent will be paid by the removal of the deductibility --


Q: and not come from the check-off? You will not need to dip into that check-off fund to pay for --

MR. WALDMAN: No, that's like an extra layer. You have -- the money comes in more than enough from the deductibility. I realize it's confusing, but this is partly because you had different desires in the two Houses that are not incompatible; they just have to be meshed. The underlying revenue comes in from the deductibility. People have the opportunity to vote with their checkoff on whether they want the money spent. And if there isn't enough people checking off, the money doesn't get spent. If no one checked off, there would be no money for those races. That's not going to happen, though.

Maybe let's keep going through it. Contribution limits -- as the President discussed -- the PAC limits are one-third in the House, 20 percent in the Senate, as they were. PAC contributions size to presidential candidates is going to be reduced to $1,000. Right now it's $5,000. To Senate candidates, we expect will be $2,500 maximum. The question was asked of the President, how did he feel since he had said during the campaign he supported a $1,000 limit. And his answer, I think, spoke for itself. He still thinks it should be lower, but believes that the aggregate limits in this bill are real PAC reform and that it's important to move forward.

The other -- one of the new elements in this bill is the lobbyist contribution proposal. And let me quickly explain that, because that was not in last year's bill. That's something that has been added this year. What this proposal says basically is that if a lobbyist or a person whose activities require it to be reported under the lobby registration act gives a campaign contribution to a member of Congress or to the president's campaign, then that person cannot lobby the member of Congress who they've given the contribution to for 12 months. And if they've given the contribution, if they've lobbied that person -- if the lobbyist has lobbied a member of Congress, they cannot contribute or raise funds for that person for 12 months.

The reason we did it this way simply is we want this to be a real proposal that's constitutional. We had looked at talked about a broader prohibition. But we believe that this is the best way to do it that's constitutional.

Q: Contributions to parties, would those be affected at all?

MR. WALDMAN: We don't think that you can do that constitutionally. We looked at it. The problem is there's not the - - the way the Supreme Court has ruled on this stuff -- we're open to all sorts of suggestions on this. But the contributions from the lobbyists, you have to show that there's a potentially corrupting nexus between the lawmaker and the lobbyist. And the contributions to parties, we didn't think would constitutionally --

Q: So as a practical matter, things like the congressional dinner the President just attended just a couple of nights ago would be unaffected. You'd still have --

MR. WALDMAN: There's bundling language about lobbyists that might be affected, that might affect that as well.

Q: Can you run through that?

MR. WALDMAN: Yes. The bundling bill last year had a provision in it that said fundraising dinners and that sort of thing are not affected by the bundling language. And what we are proposing is that this year that provision, if it's in there say, but not for lobbyists. So we think -- you cannot get -- constitutionally you can't get lobbyists entirely out of going to those dinners. Again, the President said that there's a possibility that the legislation will be strengthened as it moves through Congress. But we believe that this is -- we looked at the broadest conceivable ways of doing this because this is something that we want to have teeth. But this is what we believe is the way to do it.

Q: So other than their own money, what would lobbyists be prohibited from doing?

MR. WALDMAN: Lobbyists would also be prohibited from raising money for candidates for whom they have lobbied. And as you know, that is really where a lot of the fundraising activity by lobbyists takes place.

Q: How do you actually look into that? What's the mechanism?

MR. WALDMAN: Well, it's defined in the law. Again, this is -- a lot of this is going to get fitted into the bundling language from last year. There's a technical definition of the term solicit; and the question is whether or not being in a fundraising dinner committee counts as soliciting. And what we're saying is that it should.

Q: How broadly does this -- if somebody is, say, an officer of an organization that lobbies, would that person -- but that person doesn't personally lobby himself --

MR. WALDMAN: The definition that we took was the one from the lobby disclosure bill that is moving through the Congress now. And so that's why it's important to say not just registered lobbyists, but people whose activities are reported under the lobby registration act, because there are some people who really for all intensive purposes are lobbyists who do not register as lobbyists.

Q: So this includes both a broader congressional array and also people who lobby the Executive Branch who aren't registered now. So if I'm a lobbyist and I deal with, let's say the Treasury Department, that means I can't contribute money to a presidential campaign?

MR. WALDMAN: Can't give to the presidential campaign of the incumbent president.

Q: Why is that?

MR. WALDMAN: Because again, we want to cut the link between influence and lobbying and campaign contributions.

Q: Do you think you can do that constitutionally?

MR. WALDMAN: Again, it's the same nexus. Having taken quite a bit of our constitutional tutelage from your articles on interviewing constitutional scholars on this, the key --

Q: They change their minds. (Laughter.)

MR. WALDMAN: They've changed their minds. The key here, as a constitutional matter -- the Supreme Court -- and one of the reasons that this legislation is so complex is because of the Supreme Court cases that have overturned various parts of other campaign finance reform laws. You have to have a potentially corrupting nexus. Basically, the appearance of potential influence on governmental decision-makers to limit the speech which they say campaign contributions are. So that same argument would allow you to make that prohibition on -- giving to someone in the executive -- to a President's campaign. But you couldn't -- that's where you have to draw the line. You can't say lobbyists -- everyone else in the country can do X that has nothing to do with governmental decisionmaking, but lobbyists can.

Q: Does that mean that the lobbyists can't make the contribution, but members of his board of directors can?

MR. WALDMAN: Members of the board of directors can, but the lobbyists cannot solicit the contribution. This -- hey, the real world in Washington is the lobbyists solicit the contribution.

Q: But they send them here to lobby. It's not like you'd have to tell them. Am I being too naive about all this?

MR. WALDMAN: This is not a perfect proposal, but this does --

Q: They're employing him to do this work. It's not really necessary for him to feed back the information that -- how they hold up their end.

MR. WALDMAN: It would probably not be constitutional we believe to prohibit contributions from anyone who is on the board of an organization that lobbies. But the way that the Washington culture has functioned is that lobbyists give individual money and also raise money. And taken together with the spending limits, the PAC limits, and everything else, this provision will hopefully help change the culture in Washington. It is not -- and no one of these proposals is the be-all and end-all. But taken together, they make a big difference we think.

Q: But won't this be fairly easy for a lobbyist who knows the ways of Washington to get the board of directors, the CEO, chairman of a company, whatever, to come to Washington, to go to the Hill, go visit the executive branch? You're only talking about one person's contribution, but you have the whole corporation at your feet there who can give money and go door-to-door doing lobbying work.

MR. WALDMAN: First of all, if a CEO spends a significant portion of time coming to Washington and lobbying, there's a very good chance their activities would have to be reported under the Lobby Registration Act, and therefore they would have the same prohibition.

But the other fact is, the member of -- look, sure, someone could come in from out of town and then go talk to a member of Congress; that's constitutionally protected. And, again, if we said that anybody who goes to talk to a member of Congress who is not a professional lobbyist, then cannot contribute to that person, we believe it would probably be the case that that would not be found constitutional.

Q: Mike, could you talk about soft money? I apologize, I'm going to have to cut out of here pretty quick.

MR. WALDMAN: Yes. Nora, did you have one lobbyist question?

Q: I have one question, and forgive me if it was asked before; I was out of the room. Does the prohibition include lobbyists who lobby staff of a member, or actually just the member?

MR. WALDMAN: This is a part of the change in the lobby registration bill. The current lobby registration law, as we know, is very weak. And if you lobby staff, you usually don't have to disclose. The new bill would require you to disclose if you lobbied staff.

Q: Not the lobby bill? The prohibition --

MR. WALDMAN: We are taking the definition of lobbying from the new bill --

Q: Oh, I see. Okay.

MR. WALDMAN: -- assuming it passes, which of course, we very much want to happen.

Q: But her question was different. Would the prohibition on contributions apply to lobbying the member or just the staff -- or the staff as well?

MR. WALDMAN: The staff as well.

Q: So, if you've lobbied somebody's staff, you can't give to that person? MR. WALDMAN: Yes, because that counts as lobbying the member. Now, if you just lobby a committee without lobbying a

specific member in the committee, you can't -- right. No, I mean, this is complex stuff, obviously.

Q: What do you mean, if you're just lobbying --

MR. WALDMAN: If you just called the committee staff and said when's the hearing or something like that, and then never went and said we want you to do this amendment or vote for that, then that wouldn't apply. But again, what we are intending to go back -- we are seeking to take the Levin bill, which passed the Senate, as the basis for the definitions here. We're not trying to come up with some fancy new definitions. We want to take the definitions that are in that bill.

The specific legislative language is being worked out. The bill will be introduced in the Senate first by Senator Mitchell in the next day or two. And, of course, they may bring it to the floor as early as next week, and so the specifics of the language are being worked out. But this is the way it works; soft money.

Q: Can I ask one quick question? One last question. Why use this approach as opposed to putting the burden on the candidates to not get -- not accept contributions from lobbyists? Why not do it that way as opposed to barring the activities of lobbyists?

MR. WALDMAN: That's a possible way of doing it. We just chose to do it this way. It is up to the chambers whether they want to pass ethics rules embodying that, saying you can't raise from the candidates. We believe that, as a statutory matter, it makes the most sense to do it by the lobbyists rather than by the member. But the statute applies to everybody.

Q: Do you have any dollar figures for the amount of money that's contributed by lobbyists --

MR. WALDMAN: Lobbyists do --

Q: or that they raise? Do you have any sense of how that compares to PAC?

MR. WALDMAN: Lots. We don't. However, there are some studies done by private groups -- (laughter) -- that have tried to take a stab at that by looking at the zip codes of where people gave money and assumed that someone who lives in Cleveland, Ohio, is probably not a lobbyist; and someone who lives in Cleveland Park maybe is. And some of the other groups have looked at lawyers as a category, but I don't really -- I don't know what kind of an impact that would have.

The major impact that this would have is not so much in the money coming in -- because, sure, the board of directors might still come visit the member of Congress -- but in changing the culture of Washington. The major different between this year's bill and last year's bill is the focus on the way things are actually operating with the lobby deduction and this provision, and also the lobby reform bill that's moving through.

We all know how it works here. This kind of provision would, over time, change the way money is raised and change the way people lobby Congress. And that is the goal.

Q: Wouldn't it create a subculture, though, Mike, a subculture that would spring up around this, that lobbyists would create to get by the rules you're -- I mean, that's their job.

MR. WALDMAN: The language will say that --

Q: Not that I'm being cynical about your bill or anything. I'm just -- were you concerned about that? (Laughter.)

MR. WALDMAN: Sure, sure, sure. I mean, the history of campaign finance reform has been where you put up a wall, the money will eventually find its way to flow around. That's why it's our obligation to try and make it as tight as we can.

No one provision -- I'll say it again: No one provision or even this entire piece of legislation is going to, overnight and in a foolproof way, change the campaign finance system into something unrecognizably different. But this provision, taken together with the bundling language, the PAC restrictions, and everything else will change the culture in Washington. And that's the best we can hope for.

Q: Michael, right now --

MR. WALDMAN: Now we've got to do soft money.

Q: for a member of Congress just to call the lobbyist and say I need a couple thousand dollars from your PAC. Would that still go on?


Q: That part, PAC stuff, would end. So the guy could not --

MR. WALDMAN: The lobbyist could not solicit a campaign contribution for the member. And, again, the details, the precise details of how it's being worked out are being drafted up by Senator Mitchell, who certainly is a strong advocate of reform. And we are working with him, and at the beginning of next week, the details of the bill will be out.

Q: What about the building fund?

MR. WALDMAN: What about the building fund.

Q: Corporations could give to the building fund, or not?

MR. WALDMAN: Corporations could still give to the building fund, as was the case in last year's bill. The building fund, as a practical matter, is actually a very small part of the tens of millions of dollars of soft money that the political parties have raised.

Let me explain that -- for those who are not as expert on soft money, let me explain what this legislation does. What this legislation does, last year's bill restricted individuals to $30,000 a year aggregate giving cap. That was NS3. This is basically the same thing; we've changed it to a $60,000-a-cycle giving cap. So that if someone gives that much in the first year, they can't give at all in the second year of the cycle -- two-year cycle.

Within that, there is the existing $25,000 cap on giving to candidates, $20,000-a-year cap on giving to party committees, and a new entity, which is different from last year's bill, which are state party grass roots funds. The idea here was that if we are closing down the soft money system, we need to ensure that there is adequate resources in hard money for the get-out-the-vote grass roots activity that we all agree -- everybody on all sides of the issue -- is a good thing; that the activity that goes on is a good thing. And that again, is within the hard money cap, and that's basically, within that cap, there's more flexibility of how you can give the money than in last year's bill.

But let me stress a couple of ways that this year's bill is tighter than last year's bill.

Q: The point is -- let me just ask you one question. Is it $20,000 per year for party committees and the --

MR. WALDMAN: The grass roots fund.

Q: or $20,000 for this and $20,000 for that?

MR. WALDMAN: The grass roots fund is a separate limit within the 60.

Q: Twenty-five, 20, 20?

MR. WALDMAN: Yes, right. That's right.

Let's go through what soft money is, how it is now used, and how it will be banned. Soft money, as you know, is regulated under state law, undisclosed from prohibited sources, i.e., union treasury and corporate treasury, and in amounts that are sky-high. This bill, like last year's bill, will ban the use of soft money in federal campaigns, and we're very serious about this. And, as you can imagine, this has caused a lot of hand-wringing and soulsearching, because this is going to cost us quite a bit of money. But it's something we are willing to do, it was a commitment the President made during the campaign, and we think that it is good for the country, and even good for the Democratic Party.

Unlike last year's bill, which allowed soft money for federal party administrative costs, our proposal will not allow soft money for federal administrative costs. So in that way, it is stronger than last year's bill. Other than that, there's -- you'll look at the details -- and Senator Mitchell's office will be releasing a detailed version of it -- it's very similar to last year's bill.

Q: Mike, is there anything in here to prevent soft money from going to everyone -- some sort of funneling soft money into the building funds?

MR. WALDMAN: The building funds, as they were -- again, to stress, the building funds were in last year's bill as well. Building funds can only be used for certain things. They can't be used for salaries, they can't be used for phone banks. They can't be used for a lot of different things. They're supposed to be used for buildings and that sort of thing. Last year's bill allowed the building funds to remain. This year's bill does, too. But last year's bill allowed administrative costs of the national party to be paid for with soft money, and this year's bill will not. So even in terms of the possible uses by the national party of the soft money, this year's bill is tighter.

Q: Do you expect an identical bill to be introduced in the House, or is it going to start first in the Senate?

MR. WALDMAN: We hope so. This is the President's proposal.

Q: So it's going to start first in the Senate, you're saying?


Q: And Mitchell will carry the President's bill --

MR. WALDMAN: Yes. Senator Mitchell and Senator --

Q: Who will carry the President's bill in the House, or do you know?

MR. WALDMAN: I assume the leadership. We've worked -- their presence today testified to that.

Q: What does this do to the coordinated campaign?

MR. WALDMAN: The grass roots funds basically are the coordinated campaigns.

Q: So you'll be able to -- if you already used --

MR. WALDMAN: It's the same idea.

Q: So -- but that's a way to still get around the idea of any prohibition on the money?

MR. WALDMAN: No. It's soft -- the goal is not to have no money in the system; the goal is not to have soft money in the system, not to have undisclosed money, and not to allow bigger money than you can have now.

Q: But the people who work for the coordinated campaigns nominally on a state level were in fact working for federal candidates.

MR. WALDMAN: That's right. And those would have to be paid for with hard money. So if -- and now they're paid for with soft money. And that's precisely the point. Our goal was to enable the coordinated campaigns to continue. For those of you who don't know, coordinated campaigns are campaigns where federal candidates and the state parties pool their resources and do coordinated getout -the-vote drives and phone banks and things like that. And our goal was not to shut that down.

You can give the money in hard money, i.e., federally regulated money, to those campaigns. But then you can't give money as much to the other purposes you could give hard money to. If you give all your money to that, then you have less money you can give to a party committee at the national level or to candidates.

But you asked about the two cents VAP. This is an expansion of the presidential grant for grass roots activity. It comes to about $11 million a year, only in the presidential election year. What it basically is, it is a recognition that the -- the presidential grant was set in 1974. It was calibrated for what the costs were at the time and inflation and so on. And it's a recognition that the calibration was inaccurate and that you need a little bit more money. But it doesn't go to the parties. It goes to the presidential candidates who already received the money. It can only be used for grass roots activity.

Q: Can they use it for their share of the coordinated campaigns?


Q: You said that the presidential grant, which has currently totalled sixty --

MR. WALDMAN: -- 55 or -- 60 or something. It would be 70. Something like that.

Q: Let me just ask you a question about the public financing component of this. It's unclear to me -- would candidates be eligible to receive cash and vouchers or is vouchers the only --

MR. WALDMAN: Vouchers are the only way. This bill does not give cash to any candidates or any congressional candidates, it only gives these communications vouchers. The purpose of this is to make sure the money is only used for communication with the voters and that it's not abused. We think that that's a good protection against people possibly abusing it.

Q: And is it your understanding that the House bill will have that same provision?

MR. WALDMAN: Yes, which is a change and, in our view, an improvement from last year. We have time for one more question.

Q: Can we just get a clarification on timetable, just to clarify?

MR. WALDMAN: Sure, but -- I'll answer that, but the guy behind you had his hand up, which you couldn't know. The timetable, as we understand it, is that the Senate is going to act as early as next week, as was mentioned by the Senators and the President, the leadership -- the Democratic leadership -- has already been in discussion with a lot of Republicans. This bill in the past has had Republican support enough to pass. Several Republicans voted to overturn President Bush's veto last year. We certainly look forward to discussions with them, and we hope that there is not a filibuster.

Q: Maybe this kind of is a half question. You got 8,000 registered lobbyists; how many more above that will be effected by that provision?

MR. WALDMAN: We don't know. First of all, the lobby registration bill will --

Q: You can say that's a half of one. (Laughter.)

MR. WALDMAN: That's a full answer. The lobby registration bill -- one of the problems with the current lobby registration law is that a lot of people who are supposed to register don't register.

Q: The current bill is going to have a lot more people register, but nobody really knows how much. And, again, the definition of it being not just the people who register, but he people whose activities cause registration to occur would be a bigger sum of people. So, again, on that one, it's very difficult to predict what the dollar on that one it's very difficult to predict what the dollar impact is. That's a cultural impact more than anything else.

Q: Mike, will the communications vouchers count against the spending limits?


Q: Can you explain the bundling provision? You all would change S3s so that --

MR. WALDMAN: Let me answer this one last thing.

This is the controversy over Emily's List. The one major area where there was not agreement among the House and the Senate and the President was in the area of bundling. Last year's legislation -- bundling is, you know, when someone pulls together contributions from a lot of different sources that aren't that person and then hands them over in some way to the candidate -- last year's legislation had bundling restrictions, said you can not bundle above the amount you could give as an individual if you are a PAC, a lobbyist, a corporation, a union, a bunch of different categories. Last year's bill had what some people have considered to be a loophole which says that if you are a connected PAC, i.e., you're connected to a union or a corporation you cannot bundle, but other PACs implicitly could.

The question is whether this rule should apply to all PACs. This is not something that we could get agreement on and it's going to have to be worked out during the course of the legislation. It's no secret that folks -- that some folks in the Senate, anyway, want to close this and apply the same rule to all PACs.

Q: And is that what the President wants to do?

MR. WALDMAN: And that was what the President said was his view as well. Other people, in the House especially, are very concerned about the impact that this would have on Emily's List, which is the organization that is a donor network for women Democratic candidates.

As the President said, he has the greatest respect for Emily's List and what it does, and thinks it has made real progress in bringing women into the system. His general view is you can't have a different set of rules for interests you like and interests you don't like. We hope that something can be worked out. What he was referring to was the proposal that would enable Emily's list to -- and anyone else who is capable of doing it and has the intensity of support among it's members that Emily's list does -- of having their members send envelopes to the candidates with a contribution rather than going directly through the bundler.

Q: That would be in the legislation, wouldn't it? They could -- on their own, right?

MR. WALDMAN: Well, some people think you have to change S3 to allow that to happen.

Q: Could you just speak to enforcement very quickly and how this will be policed?

MR. WALDMAN: Whatever enforcement there is. Last year's bill -- one of the other ways this year's legislation will strengthen last year's legislation is enforcement. The Federal Election Commission has been criticized for not being able to act quickly and strongly enough in the past to enforce the campaign finance laws. This is another area where we don't have specific language among the House and Senate, but general principle agreement I believe and the Senate bill, anyway, will talk about strengthening the General Counsel of the FEC, giving the General Counsel the ability to take actions without needing a full majority of the Commission to approve of it.

As you know, the Commission is 3-3 Republicans and Democrats; often there's been a deadlock. So the Senate is going to have a bill. I'll let them talk about it, but there is general, strong agreement on all parties: House, Senate, and the White House, that the Federal Election Commission must be strengthened as part -- and significantly strengthened as part of this legislation, or the legislation will look good on paper and won't really mean anything.

Thank you.

END11:45 A.M. EDT

William J. Clinton, Press Briefing by Special Assistant to the President for Policy Coordination Michael Waldman Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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