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White House Fact Sheet on the President's Campaign Finance Reform Proposals

June 29, 1989

Today the President announced a comprehensive campaign finance proposal designed to lessen the power of special economic interests and restore competition to American congressional elections. The package reflects the President's strong commitment to increasing the roles of individuals and the political parties in the electoral process. It is also designed to reform the system of campaign finance under which in the 1980's House incumbents have a 97.7-percent reelection rate and Senate incumbents an 85-percent reelection rate. The proposals follow general themes first articulated by the President in his April 12 speech to the American Society of Newspaper Editors:

Eliminating political action committees (PAC's) supported by corporations, unions, or trade associations, and prohibiting such entities from paying for the overhead or administrative costs of any independent PAC.

Strengthening political parties by increasing the amounts they can spend on behalf of congressional candidates. This source of funds would permit legislators to spend less time fundraising, would ensure that challengers have greater resources with which to challenge incumbents, and would further limit the role of special economic interests in elections.

Addressing the problem of the "permanent Congress" by reforms designed to reduce the unwarranted advantages of incumbency. Specifically, the proposals would prohibit the personal use of excess campaign funds, drastically reduce congressional mailings under the frank, ban the rollover of campaign funds from one election cycle to the next, and legislate fair neutral criteria for the redistricting of congressional and legislative lines that will follow the 1990 census.

Fully disclosing all "soft money" spent by the political parties and all labor unions, corporations, and trade associations to influence a Federal election.

The President's campaign finance reform package is as follows:

1. Contribution Limits

Curtailing Political Action Committees (PAC's)

The proposal calls for the elimination of PAC's sponsored by corporations, unions and trade associations. The bulk of PAC contributions come from these corporate, union, or trade association PAC's: They accounted for nearly 90 percent of the approximately $160 million contributed by PAC's in the 1987 - 1988 election cycle.

Contribution limits for the remaining PAC's, i.e. those not sponsored by corporations, unions, or trade associations (the so-called nonconnected or independent PAC's), would be reduced from $5,000 to $2,500 per candidate per election. It appears that freedom of association guarantees under the first amendment make it impossible to eliminate these independent PAC's.

Corporations, unions, and trade associations would also be prohibited from using Treasury funds for nonconnected PAC administrative or overhead costs, including corporate or union subsidies for payroll deductions to fund a PAC.

PAC contributions to national and State political parties would stay the same ($15,000 per year). The remaining independent PAC's would also be able to continue funding such participatory activities as voter registration and get-out-the-vote programs, which would become fully reportable.

The proposal would codify the Beck Supreme Court decision, holding that union members cannot be forced to have mandatory union dues go to political causes or organizations they do not support.

Leadership PAC's, including those associated with Presidential candidacies, would be curtailed by limiting Federal candidates and elected officials to one fundraising committee and by prohibiting transfers between fundraising committees.

All but political party committees would be prohibited from bundling, the practice where an organization or its officials solicit contributions from its employees or members at a central location, "bundles" them, and sends them to a candidate without affecting the organization's contribution limits.

Independent expenditures would be subject to additional notice requirements. Any advertisement or other political communication paid for by independent expenditures would have to include additional disclosure throughout, identifying the person or organization funding it and stating that it is not authorized by any candidate.

Strengthening Political Parties

The proposal increases to $0.05 from $0.02 times the voting age population the coordinated expenditure limits that parties may spend on behalf of Federal candidates (ranges now from $92,000 to about $1.5 million, depending on population, for a Senate race; about $46,000 for a House race). This would allow a larger percentage of contributions to a candidate to come from political parties.

2. Reforming Unfair Advantages

Limiting the Use of Excess Campaign Funds

The rollover of excess campaign funds into the next election cycle would be prohibited by requiring that all campaign treasuries be zeroed out by January 31 following the election. All excess campaign funds would have to go to national or State party committees, the National Debt Retirement Account of the United States Treasury, or all campaign contributors as pro-rata refunds.

Presidential candidates would also be prohibited from using excess campaign funds from previous races to fund their Presidential efforts.

The proposal bans the conversion of excess campaign funds for personal use. With regard to the Congress, this would apply as follows: House Members who are grandfathered could no longer convert the funds to personal use. Senators would be precluded from supplementing official accounts with their own excess campaign funds.

Limiting the Use of the Frank

The proposal bans the use of the frank for unsolicited mass mailings.

Quarterly filings would be required by all Members of Congress regarding the amounts spent on franked mail. The reports would be due within 30 days of the close of the quarter.

Fairness in Redistricting

The proposal calls for the end of gerrymandering through the promulgation of criteria for fair redistricting in Federal elections. Such criteria will include requiring district lines to adhere to compactness standards and follow established community boundaries.

The legislation will emphasize the need for congressional and State legislative plans to follow the provisions of the Voting Rights Act.

3. Soft Money Disclosure

Full disclosure of all "soft money" contributions and expenditures by political party committees would be required under the proposal.

Labor unions, corporations, and trade associations would have to disclose all money spent to influence a Federal election, including voter registration and get-out-the-vote activities, as well as any communications which advocate the election or defeat of any Federal candidate.

The proposal also calls for the adoption of realistic allocation guidelines to attribute the costs of party activities proportionately to Federal candidates. This will assure that non-Federal dollars are not used to support Federal candidates.

4. Honoraria Ban

Separate legislation will be sent to the Congress in the next few days to ban honoraria and to address certain aspects of compensation for Federal officials. This package will include a 25-percent pay increase for judges, which the President previously recommended, and an increase for a limited number of specialized professionals where the executive branch is currently not competitive, such as scientists and surgeons. The President will also work with Congress on the development of details for increasing the pay of Members of the Congress, as well as other senior employees of the executive branch.

George Bush, White House Fact Sheet on the President's Campaign Finance Reform Proposals Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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