Tags: Congress | Spending | Political | Money

Budget Deal Erodes Limits on Political Money, Raises Shutdown Risk

By    |   Wednesday, 10 December 2014 07:34 PM

Congress is set to make it easier for political parties to collect bigger checks from their wealthiest backers — if Democrats do not scuttle the plan first.

The campaign finance proposal was tucked into an unrelated measure to keep most of the government open through the coming September.

The effort is the latest bid to weaken campaign finance rules passed after the Watergate scandal in the 1970s and updated a decade ago. It follows three Supreme Court rulings that gave rise to free-spending super PACs, which can accept unlimited contributions from people and corporations alike, and an increased role for outside groups to shape the outcome of elections.

Congressional Democrats objected on Wednesday to controversial financial and political campaign provisions tucked into a $1.1 trillion U.S. spending bill, keeping the risk of a government shutdown alive.

The complaints from House of Representatives Minority Leader Nancy Pelosi and other top Democrats clouded the chances for passage of the funding bill as a midnight Thursday deadline drew near.

Republicans were preparing a one-or-two day extension to keep federal agencies open past the deadline, but were unwilling to make any concessions on dozens of provisions added to the bill.

Pelosi said Democrats were "deeply troubled" by Republican measures that would kill planned restrictions on derivatives trading by large, federally insured banks and expand tenfold the amounts that individuals can donate to national political parties.

"These provisions are destructive to middle-class families and to the practice of our democracy. We must get them out of the omnibus package," Pelosi said in a statement.

Democratic support is seen as critical to passage of the spending bill in the House, as Republican aides and lawmakers say it is unlikely their party would be able to muster enough votes for passage on its own.

Many conservative House Republicans oppose the bill, claiming it fails to deny funding for President Barack Obama's controversial executive action on immigration. And Democrats still control the U.S. Senate.

Democratic Senator Elizabeth Warren, a staunch advocate for tougher regulation of Wall Street, called for Democrats to withhold support from the bill due to the derivatives provision, which would effectively strike down a portion of the Dodd-Frank financial reform law enacted in the wake of a financial crisis fueled partly by complex mortgage derivatives.

But House Republicans were not blinking. A party leadership aide said no changes would be made to the spending measure, which was negotiated by appropriators from both parties. A vote was planned for Thursday.

In 2013, a House vote to repeal the same rule, which requires that banks move derivatives trading to units that do not benefit from federal deposit insurance, attracted 70 Democratic votes.

White House spokesman Josh Earnest said the administration was still studying the bill and was not recommending how Democrats should vote.

"As always, we believe that Democrats should vote their conscience. They should make those kinds of decisions for themselves," Earnest told a news briefing.

Unveiled late on Tuesday night, the 1,603-page spending bill got a warm welcome from many House Republicans in a closed-door session with Boehner on Wednesday morning.

While the legislation would fund most federal agencies through September, the end of the current fiscal year, it would only pay for Department of Homeland Security (DHS) activities through February in a move to gain leverage over Obama's immigration order.

DHS is the main agency that will implement Obama's order, which was announced in November. Supported strongly by immigration activists and staunchly opposed by many Republicans, the president's action eased deportation threats for around 4.7 million undocumented immigrants.

Under the spending bill introduced in the Republican-led House, each super-rich donor would be allowed to give almost $1.6 million per election cycle to political parties and their campaign committees. The comparable limit for 2014's elections was $194,400.

In fact, individual donors to the Democratic National Committee or Republican National Committee this year were limited to $32,400. Under the new rules, individuals could annually give up to $324,000 to the national parties' accounts for day-to-day operations, legal fights, nominating conventions and building improvements.

Their House and Senate campaign committees each could raise another $226,800 per donor each year.

Married couples could reach $3.1 million per election under the legislation.

The proposal has potential for both the Republican and Democratic parties but does nothing to restrict the cash that well-heeled donors can give elsewhere. But the higher limits might make donors more seriously consider party committees, which can coordinate with candidates, over super PACs, which cannot and sometimes are at odds with party strategy.

Watchdog groups decried the move as corrupting, cynical, out-of-touch and selfish.

"This backroom deal represents everything Americans detest about Washington and about Congress," said Meredith McGehee, policy director at the Campaign Legal Center.

Added Lawrence Norden of New York University's School of Law's Brennan Center for Justice: "This raises the suspicion that politicians are trying to manipulate the campaign finance system for their own benefit, which will serve only to decrease average citizens' participation in our electoral process."

Another campaign finance activist, Democracy 21 president Fred Wertheimer, said "Republican and Democratic congressional leaders have chosen to embrace huge amounts of corrupting money for politicians over the interests and needs of the American people."

The proposed campaign finance provision appears on page 1599 of the 1603-page bill that would keep most of the government open through September. The one exception is the Department of Homeland Security, which would run out of money at the end of February.

At the Capitol, House Speaker John Boehner said the agreement had backing from parties' budget negotiators and defended the changes to campaign finance rules.

"The Congress is very concerned about taxpayer funding of political activities," Boehner told reporters, reminding them that President Barack Obama earlier this year signed legislation that ended tax dollars to pay for parties' nomination convention.

That bill's main focus was research on childhood illness but it effectively added about $20 million to each central party's convention committee. Leaders from both parties say the cost could be as high as $60 million for each 2016 convention.

Following a closed-door caucus meeting, House Democratic leaders complained about parts of the bill, especially the changes to the political donation limits.

"I'm not very happy about it," said Rep. Steny Hoyer, the Maryland Democrat tasked with rounding up votes for his party.


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Congress is set to make it easier for political parties to collect bigger checks from their wealthiest backers - if Democrats do not scuttle the plan first.Under a spending bill introduced in the Republican-led House, each super-rich donor would be allowed to give almost...
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Wednesday, 10 December 2014 07:34 PM
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