Statement of Administration Policy: H.R. 5400 - Campaign Cost Reduction and Reform Act of 1990

(House)
(Swift (D) Washington)

Although the Administration agrees that the current campaign finance system suffers from a number of serious defects and that there is a need for real reform, the Administration strongly opposes enactment of H.R. 5400. While the following statement details several of the Administration's most serious objections to the bill, it does not represent an exhaustive list. If H.R. 5400 were passed in its current form, the President's senior advisors would recommend that it be vetoed.

The Administration recognizes the need for a comprehensive reform package that confronts the twin evils of the current system — (1) practices which give incumbents unfair advantages, and (2) the role played by special interest "PACs" subsidized by corporations, labor unions, and trade associations. H.R. 5400, however, would aggravate many of the worst features of the existing financing system which heavily favors incumbents.

H.R. 5400 would unconstitutionally coerce House candidates into agreeing to participate in a program of campaign spending limits. Under the program, if a non-participating challenger raises or spends even $1 over an amount equal to approximately 36 percent of the "voluntary" limit, the participating incumbent — who already would receive free broadcast advertisements, postal subsidies, and indirect subsidies resulting from tax credits to his or her contributors — could make expenditures without regard to the applicable limit. Thus, even if a challenger raised or spent only 40 percent of the applicable limit, the participating incumbent would receive all of the benefits of participation with few of the costs. Given the attractiveness of the benefits, and the fact that most candidates will inevitably go over the 36 percent mark, the system would create enormous coercive pressure to participate.

A public financing amendment to be offered by Representatives Obey and Synar would intensify this unconstitutional coercion by adding matching payments to the basic package, and by providing an additional round of matching payments (in addition to all of the other benefits already provided by H.R. 5400) when a nonparticipating candidates exceed the 36 percent threshold.

The effect, if not the purpose, of these provisions would be to coerce challengers to limit their efforts against incumbents. In doing so, H.R. 5400 would place unconstitutional burdens on the rights of individual candidates to make campaign expenditures as well as on the rights of contributors. In addition, by attempting to equalize campaign financial resources, the proposed program would stack the deck even more heavily in favor of incumbents, who enjoy substantial name recognition at the start of a campaign. In a time of significant fiscal constraints, there is no justification for spending taxpayer dollars on an incumbent protection system.

Moreover, an amendment to be offered by Representative Swift would expressly authorize the transfer of unexpended campaign funds for use in future elections. This provision would reinforce one of the worst incumbent-protection features of the current system — the amassing of "war chests" so large that they deter challengers from even considering contesting the incumbent's seat. This provision would take us in exactly the wrong direction, and it has no place in a campaign reform package.

Section 203(c) of H.R. 5400, which would require broadcast licensees to provide additional free broadcast time to participating candidates who have purchased a certain amount of time, would violate the First Amendment rights of broadcasters and would raise difficult issues under the Takings Clause of the Fifth Amendment. Moreover, section 203(c)'s attempt to require third parties to subsidize the speech of only certain specified candidates raises additional serious constitutional questions.

The Administration also objects to several sections of the bill that would unconstitutionally regulate the content of political advertisements. Section 117 of H.R. 5400 would impermissibly require that: (1) photographic images of the candidate be displayed in candidate television broadcast advertisements, and (2) independent broadcasts display continuously certain prescribed information.