Statement of Administration Policy: S. 3 - Senate Election Ethics Act of 1991

(Senate)
(Boren (D) Oklahoma and 21 others)

Although the Administration agrees that the current campaign finance system suffers from a number of serious defects and that there is a need for reform, the Administration strongly opposes enactment of S. 3. If S. 3 is presented to the President in its current form, his senior advisers will recommend that it be vetoed. The following statement details several of the Administration's most serious objections to the bill. It does not, however, represent an exhaustive list.

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 political action committees (PACs) subsidized by corporations, labor unions, and trade associations. The President proposed such a package in 1989. S. 3, however, would aggravate many of the worst features of the existing financing system.

Campaign finance reform must employ neutral principles that foster free competition in ideas and do not threaten the constitutional guarantee of freedom of speech. S. 3 would coerce Senate candidates into agreeing to participate in a program of unconstitutional campaign spending limits. If a nonparticipating candidate reported that he or she had exceeded the spending limit, a participating major party candidate would be entitled to public funds in the amount of two-thirds of the spending limit. The participating candidate would be entitled to an additional payment in the amount of one-third of the spending limit if the nonparticipating candidate exceeded the limit by another one- third.

The expenditure ceilings would restrict challengers' efforts against incumbents and limit the quantity of political speech in which candidates could engage. In doing so, S. 3 would place unconstitutional burdens on the rights of individual candidates to make campaign expenditures as well as on the rights of contributors, only a compelling interest of the Government, such as preventing corruption or the appearance of corruption, could warrant such a restriction on political speech. No such justification applies here.

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 wasting taxpayer dollars on an incumbent protection scheme.

Several of the provisions of S. 3 that purport to regulate political advertisements also violate the First Amendment rights of political candidates. Nonparticipating candidates must, for example, include in all their advertisements the sentence: "This candidate has not agreed to abide by the spending limits for this Senate election campaign set forth in the Federal Election Campaign Act." The requirement would not only mislead the public into believing that the candidate is not complying with the law, thus further coercing candidates to accept expenditure limits, but would also strike at the heart of the First Amendment by imposing disruptive government regulation on political messages. Other regulations on political advertising imposed under the bill (i.e., in section 203) are also unreasonable and go well beyond the measures needed to ensure proper disclosure.

The President favors the abolition of all special interest PACs subsidized by corporations, unions, and trade organizations. S. 3 would go beyond this by enacting a broad ban on campaign contributions and expenditures by independent, unsubsidized organizations and associations. These organizations are not part of the problem of public corruption. Thus, a ban on these organizations participating in election politics cannot be justified by an interest in avoiding corruption. This overbroad ban creates needless constitutional difficulties that could be avoided by narrower prohibitions suggested by the Administration.

In addition, the Administration strongly objects to the provision of the bill that sets a postal subsidy bearing no relationship to cost. Currently, reduced postage mailers (e.g., charitable and religious organizations) pay direct costs associated with their mail. S. 3, however, grants political candidates an even greater subsidy. This level of subsidization is inconsistent with the Postal Service Reorganization Act and sets an unwise precedent.

Scoring for the Purpose of Pay-As-You-Go and the Caps

The Boren substitute for S. 3 is not subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act (OBRA) of 1990. As currently worded, benefits from the Senate Election Campaign Fund are subject to the availability of appropriations.

If S. 3 were fully funded, there would be significant outlay consequences. OMB's preliminary estimate of the outlays that could occur if the bill were fully funded is as follows:

($ in millions)

The 1994 outlays would be subject to pay-as-you-go if mandatory spending language such as that in the reported version of S. 3 were restored. The outlays would be scored under the discretionary caps if spending were instead subject to appropriation action.

The Boren substitute would also result in additional outlays from the Postal Service revenue foregone appropriation. OMB's preliminary estimate of these outlays (which are not scored for pay-as-you-go purposes) is as follows:

($ in millions)