Politics without soft money

In the short run, the Republican Party is the big winner following the Supreme Court's blockbuster ruling on campaign-finance reform.

Now that the year-old ban on so-called soft money donations to the parties - the large, unlimited contributions from corporations, unions, and wealthy individuals - has been affirmed, the raising of limited "hard money" donations is a central part of the game.

The GOP is better than the Democrats at raising hard money. Through October of this year, the Republican National Committee and the GOP House and Senate campaign committees had raised $173 million compared with the Democrats' $75 million.

Furthermore, the campaign-finance ruling affirmed the increased limit on hard-money donations - furthering the GOP advantage. The limit on individual contributions to a federal candidate is now $2,000 per election, up from $1,000. An individual can now donate up to $25,000 a year to a party, up from $20,000.

"At least through 2004, there's an advantage to Republicans," says John Green, a political scientist at the University of Akron. "The Democrats and Republicans are adapting to the new law, but there really isn't very much time. And the pressure of the 2004 campaign will be upon them."

The longer-term picture is less predictable, but the high court itself, in its majority ruling, echoed the common view among observers of money in politics that funds will inevitably find their way into the system - and that Wednesday's ruling will not be the final word. "Money, like water, will always find an outlet," the opinion stated. "What problems will arise, and how Congress will respond, are concerns for another day."

On that score, liberals appear quicker than conservatives to set up alternate groups designed to capture the old soft-money donations, through groups known as "527s," named for the provision in the federal tax code that governs them. Already among the best known is a group called America Coming Together, which has the financial backing of billionaire financier George Soros.

Now that the ban on soft money stands, however, analysts expect conservatives to quickly ramp up creation of separate committees as well, independent of the Republican Party. The impact on the parties themselves - particularly their ability to put out a clear message - could be profound.

"Parties serve a very important function in American society in mediating and moderating extreme viewpoints and trying to build working coalitions, whereas special-interest groups generally pursue only narrow interests," says Bobby Burchfield, a lawyer who represented the Republican National Committee in opposing the reform. "I won't predict the death of the parties, but I do think it is foreseeable that political parties will hold less influence and special interest groups more influence in American politics going forward."

Reform supporters argue that the new system is vindicated by the fact that the parties and candidates have lived under it for a year and are adapting. "The candidates and parties are finding ways to raise money; indeed they're doing it in a better fashion, as you see with [Howard] Dean and the broad grass-roots support coming in through the Internet," says Norman Ornstein of the American Enterprise Institute, who helped draft the new law.

"The Democratic Party is starting for the first time to build a small-donor base, after basically relying on the drug of soft money."

Mr. Ornstein also notes that while the GOP is better than the Democrats at raising hard money, the Republicans rely heavily on expensive direct mail, so some of their edge disappears when one looks at the bottom line.

Another development to watch for in the 2004 election cycle, experts say, will be a surge in direct mail, telephone calls, and get-out-the-vote drives - namely, in the states and districts with competitive congressional races and in presidential battleground states.

"The Democrats on the issue advocacy side have been more active so far than the Republicans," says David Magleby, a campaign finance expert at Brigham Young University. "But the Republicans have the shells ready to go to work tomorrow. Their own George Soroses are getting phone calls today."

What remains unclear, he adds, is the adequacy of disclosure on the new groups that are forming to influence debate. Under the old soft-money system, the amount and origin of donations had to be reported to the Federal Election Commission, and the information was available from the agency and the Web sites of watchdog groups. With the 527s and other groups, disclosure is required through the Internal Revenue Service, and it's uncertain how timely the disclosure will be.