In 1996 several colleagues and I argued for a limitation on the source and size of contributions to parties (i.e., an elimination of soft money) in exchange for the freedom to spend hard money as they deemed most efficacious. This recommendation did not become part of BCRA and it is no surprise that party independent spending in presidential and congressional elections has exploded. In the two elections before BCRA, party independent spending totaled $3,866,977 in 2000 and $3,645,408 in 2002; after BCRA, the comparable figures were $264,524,078 in 2004 and $223,746,652 in 2006. What are the costs of maintaining this system of limited party coordinated spending and unlimited party independent spending? And what would be lost if it were replaced by a system of unlimited coordinated spending?

The costs of the present system are diminished efficiency and accountability. Having to set up a separate independent spending operation increases the administrative expenses born by parties. More importantly, it runs the risk of conflicting messages and less than optimal timing of ads run by candidates and their parties. Party independent spending also blurs the lines of responsibility and makes it more difficult for voters to hold candidates and parties accountable for their campaign ads. Some lack of accountability is an inevitable cost of independent spending by outside groups but it need not be borne by political parties. Amending federal campaign finance law to remove limits on party coordinated spending would increase the efficiency and accountability of party campaign activities on behalf of its candidates.

Moreover, it would do so without compromising any of the advantages attached to the existing system. BCRA's prohibition on corporate and union treasury contributions to parties and its limits on individual donations (to party committees and aggregate totals during an election cycle) would, under the new system, prevent (as it does now) candidates from using parties to launder unlimited contributions from special donors. Parties now routinely tally contributions directed by candidates to party committees and steer those resources to benefit those same candidates. Switching from unlimited independent to unlimited coordinated spending would not alter the nature of this transaction nor the amounts of money involved.

Indeed, I see no evidence that repealing the limit on party coordinated spending would undermine contribution limits now in place for candidate campaigns, increase the influence of large party donors, or advantage one political party over another. I know that Republicans have been supportive of this change in law while Democrats have been generally opposed to it. But I see no empirical basis for this party disagreement. Any fundraising and spending allocation behavior permitted under the new system is possible under the existing system. A new system of unlimited coordinated party spending would, however, strengthen ties between parties and their candidates, increase the accountability of candidates for party-financed campaign activities, and improve the efficiency of party operations. The latter might have the desirable side effect of encouraging the parties to target their resources in a less concentrated fashion, thereby expanding the number of seriously contested races.

This solution is excerpted from testimony before the Senate Committee on Rules and Administration on April 18, 2007. The full statement is available at the Brookings Institution website.