The House leadership yesterday gave up on further Internet deregulation and chose instead to move to 527 "reform," now expected on the floor next week.  It is not yet known which bill the Republicans will bring before the House.  Most likely, it will be a version of one already introduced in the Senate by Senator McCain.  Sponsored by Congressman David Dreier, it includes two well-established components supported by the reform community:

(1) the regulation of "527"s, compelling those not registered with the IRS to submit also to FEC jurisdiction and to comply with federal financing requirements; and

(2)  more regulation of political committees, already operating under federal restrictions on their "hard" (federal) and "soft" (nonfederal) funds, which would be still more limited when raising and spending money for their public communications and organizing activities.

     The Republicans have adopted these reform community proposals and added a third:  the elimination of limits on party spending for particular candidates in federal races—Presidential and Congressional.  Under the party coordinated spending limits now in place, the national and state committees possess special spending authority, but it is subject to limits that the parties can avoid only by spending "independently" of its candidates.  The Republican version of 527 reform would remove all limits, allowing for unrestricted spending for particular candidates on a completely coordinated basis.

      This is the Republican Party policy argument: that soft (527) money will have been "converted" into hard (party) money, and that money raised and spent "outside the system," through 527s, will have been brought back within it, via the parties.  This is the logic of reform, easily put into partisan service.  As Tom Edsall pointed out, this is partisan "reform" if it is judged by its impact. Thomas B. Edsall, "'527' Regulation Would Affect Democrats More," Washington Post (Mar. 28, 2006) at A3.    It is also partisan in intent, having been added to the Republican legislative agenda in 2004, when President Bush came under attack from 527s such as the Media Fund and from "nonconnected" political committees like America Coming Together (ACT).  In the meantime, the Republicans, doing the simple math, understand the significance of the difference in DNC and RNC fundraising.  In 2005, the gap was 2:1 in the GOP's favor in total fundraising.  The advantage enjoyed by the Republicans as of March 2006 is nearly 5:1 ($40 million to $9 million). 

      Some Republicans are queasy about this enterprise.  Through the Republican Study Conference, chaired by Mike Pence, there has been appeared publicly expressed skepticism about this new regulatory offensive.  Paul Teller, RSC blogger, acknowledges that the motivation is simple partisanship, spiced with incumbent-protectiveness: 

For some reason, more and more Republicans are supporting the notion that we need to increase federal regulations on citizens groups known as "527s."  This new-found love of federal regulation flies in the face of the Republican majority’s approach to campaign finance reform just a few short years ago (the Shays-Meehan/McCain-Feingold legislation; Public Law 107-155).  What’s amazing is that the intellectual underpinnings of the new Shays-Meehan 527 regulation bill (H.R. 513) are identical to those of McCain-Feingold.  That is, both seek to solve the "problem" of increasingly active citizens groups in the political system with heavier, more cumbersome and harder-to-understand federal regulations.  Yet, too many Republicans support this regulatory approach today, even though they sharply opposed it a few years ago.

      This, mind you, is a Republican speaking, to Republicans.  And he asks of his fellow party members:

[W]hat will Republicans do when the calls don’t stop?  Will we aggressively promote the Pence-Wynn deregulatory approach, or will we continue to play regulatory whack-a-mole by clamping down on the entities that dare escape the maximum federal regulations today--501(c)4s, media corporations, and individuals?

      Now the reform community is so far quiet.  Its press offices have been busy with praise for the FEC, as it successfully sought to discourage further Internet deregulation, and with disdain for Congressional lobbying reform.  To this point, it has resisted any fusion of 527 and lobbying reform, but this is no longer a concern, since the House leadership intends to bring the bill to the floor on a "stand-alone" basis.  The coming days will reveal whether reformers are prepared to enter into an alliance with House Republicans to move legislation to regulate independent progressive speech  and organizing.  

      Other groups and interests, active in the Internet debate, may well pass on this debate, moving on to other things now that their own immediate concerns have been addressed.  This is too bad and, in the long run, self-defeating.  The attack on 527s is an attack on independent speech, experienced as an inconvenience or worse by those with the power now to silence their critics.  As Paul Teller at the RSG appreciates, 527 regulation is, in this respect, by no means a world apart from the once looming regulation of "bloggers" (a threat that will materialize again).  In both cases, the expenditure of money to the discomfiture of political interests—including reform interests committed to the regulation of politics—has stirred calls for "reform."  Suggestions that the proposed reforms  may well be unconstitutional—suggestions made even by some, like Rick Hasen, who are generally sympathetic to campaign finance reform—find only a limited audience, and this audience is not on Capital Hill, certainly not in the House Republican leadership (Pence excluded).

      In 2004, when the FEC considered 527 regulation under heavy pressure from the Republican Party and the reform community, a strong and successful defense depended on argument heard from a wide variety of voices, including those of the 501(c) tax-exempt community.  This same breadth of concern may be needed now to even the odds just a little in the coming legislative contest.  The Republicans after all have votes; the reform community controls much of the press.  The 527s will need allies, all they can get, in the tax-exempt and broader progressive community. 

     Progressives need to appreciate that "reform" is no longer their own:  it is a not a simple vote, clear and pure, to humble the powerful.   Now reform has become the cause of the powerful:  Denny Hastert and Trent Lott quite like it, too, and not since Theodore Roosevelt has any US President matched G.W. Bush’s accomplishments in campaign finance reform.  Having signed McCain-Feingold, he is prepared, as he has said repeatedly and with steadfast conviction, to add 527 "reform" to this legacy. 

NOTE:  We have late word that a District court, in the case brought by the Republican party and supported by the reform community seeking regulation of 527s, may have ordered the FEC to act or explain more acceptably why it will not do so.  We will post further as we confirm and obtain more information.

Bob Bauer