Statement of Administration Policy: H.R. 3750 - House of Representatives Campaign Spending Limit and Election Reform Act of 1991

(House Rules)
(Gejdenson (D) Connecticut and 65 others)

The Administration strongly opposes enactment of H.R. 3750 because it would aggravate many of the worst features of the existing campaign financing system. The Democratic leadership's campaign reform program would result in nothing more than a taxpayer financed incumbent protection plan. If H.R. 3750 is presented to the President in its current form, his senior advisers will recommend a veto.

President's Proposals and Key Principles

The current campaign financing system is seriously in need of reform. In 1989, the President proposed 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 labor unions, trade associations, and corporations.

Campaign finance reform must also: (1) employ neutral principles that foster free competition in ideas without threatening freedom of speech; (2) encourage participation at the grass roots level, especially by individual constituents; and (3) not be financed by the taxpayers.

H.R. 3750 is incompatible with the President's proposals and these key principles. H.R. 3770, the "Fair and Competitive Election Act of 1991," introduced by Rep. Michel, is designed to make elections much more competitive, and return control of elections to voters by reducing the reliance on Washington based special interest and political action committees.

Objections to H.R. 3750

The Administration strongly opposes H.R. 3750 because it would:

• Coerce House candidates into participating in a program of campaign spending and contribution limits by imposing unfair penalties on nonparticipating candidates while making taxpayers reward participating candidates. The coercive spending limits would stack the deck even more heavily in favor of incumbents. Certain contribution limits would be imposed even on nonparticipating candidates.
  
  
• Propose mechanisms to pay for financing House campaigns that either raise serious constitutional questions or are unlikely to produce the requisite revenues. The Democratic leadership plan would, in effect, amount to a tax increase primarily to subsidize incumbent politicians.
  
  
• Violate the Constitution by restricting the quantity of political speech. Such a restriction can only be justified by a compelling interest of the Government, such as preventing corruption or the appearance of corruption. No such justification applies here.
  
  
• Discourage independent dissent by countering it with Government-funded speech.
  
  
• Impose unreasonable regulations on political advertising that go well beyond the measures needed to ensure proper disclosure. The Communications Act of 1934 already imposes basic sponsorship identification requirements on both broadcast licensees and cable television operators.
  
  
• Establish separate campaign financing systems for House candidates. Real reform means continuing the current practice of applying similar rules to both House and Senate candidates.
  
  
• Limit campaign contributions from all PACs — including independent, unsubsidized groups — and limit certain expenditures by party committees. Although the President favors the abolition of all subsidized special interest PACs, there is no constitutionally permissible basis for placing these restrictions on unsubsidized PACs and party committees.
  
  
• Be inconsistent with the Omnibus Budget Reconciliation Act of 1990, due to the directed scorekeeping provisions.

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

H.R. 3750 would require the Office of Management and Budget to prepare within five days of its enactment a "conditional pay-as- you-go estimate" for purposes of the Omnibus Budget Reconciliation Act (OBRA) of 1990. The estimate would have to assume that the spending provisions of the bill become effective. The estimate would take effect for OBRA purposes on January 1, 1993, only if the costs of the bill had been offset by subsequent legislation as required by H.R. 3750.

Provisions of H.R. 3750 relating to contribution limits, matching funds, and campaign surpluses, would not take effect unless, on January 1, 1993, each of the following conditions had been met: (1) enactment of a statute that raises revenue or reduces spending, and states that the provision has been enacted for the purpose of effectuating H.R. 3750; and (2) the pay-as-you-go savings from this later enactment are equal or greater to the costs estimated in the "conditional pay-as-you-go estimate" required by the bill.

OMB's preliminary estimate is that the "conditional pay-as-you-go estimate" required by the bill would show increased FY 1994 outlays of $23 million. This estimate is based on the 1990 House campaign experience. Final scoring of this legislation may deviate from this estimate.

Regardless of whether the conditions described above were met, H.R. 3750 would also result in additional budget authority (BA) and outlays from the Postal Service revenue foregone appropriation. These BA and outlays would not be scored for pay- as-you-go purposes, but would have to be included in the discretionary caps. OMB's preliminary estimate is that the increase in BA and outlays would be $12 million in FY 1994 and $14 million in FY 1996.