WHY HIGH COURT MAY SLAM MCCAIN'S LAW

LIMITS on campaign donations and spending over the last three decades, proponents predicted, would make elections more competitive, reduce corruption and encourage more people to vote. But both federal and state limits have had the opposite result.

Regulations instead entrenched incumbents, increased winning margins and reduced the number of challengers. The decrease in competition reduced, not increased, voter interest and participation.

Unfortunately, the new McCain-Feingold law, a challege to which the Supreme Court will hear today, promises more of the same.

Consider the most obvious unintended consequence of existing rules: entrenching incumbent presidents.

Under the current rules ,presidential candidates who accept federal funds are will be limited to some spending $40 million in the 2004 primaries and $70 million in the general-election campaign.

Democratic candidates, who must fight each other for their party's nomination, will likely reach the primary spending limit by March - when their battle will be over, though the convention, when the general-election fight begins, is in August.

President Bush, who faces no opposition, can then use his "primary campaign" funds against whichever Democrat wins the nomination - that is, to attack from March to August an opponent who has no money left to pay for a response. (Bill Clinton had the same advantage over Bob Dole in 1996.) The problem is so obvious and so bad that Howard Dean is now considering forgoing federal funds precisely to avoid this spending limit.

The regulations entrench incumbents in other ways. For example, incumbents typically have a list of regular donors from many previous elections, and thus can more easily raise small amounts of money from many different donors.

Spending limits for a given election also help incumbents because their political positions are already well known (thanks in part to past campaign spending). A less-known challenger needs to spend a certain amount simply to make up for that "name recognition" advantage -so a "fair" limit on total spending actually helps the incumbent.

Think about it: Suppose it takes the unknown $1 million simply to tell the voters where he stands; if total spending is limited to $2 million, he'll effectively be outspent two to one - whereas if the two candidates could each spend $5 million, the gap would be much narrower.

The impact of campaign-finance rules can clearly be seen in the post-World War II election data: Before 1976, when donation limits began, House members lost 12 percent of their races; after '76, it was just 6 percent. Senators moved from a 24 percent loss rate to 19 percent.

The same pattern shows up in states that already have McCain-Feingold type donation limits. I conducted a study on all 1,969 state senate seats in America from 1984 through to the primaries in 2002. The findings: Donation limits raised incumbents' winning vote margin by at least 4 percentage points. The increase was up by as much as 23 percent when political parties' donations were also restricted.

And there were fewer competing candidates, too - a reduction of 20 percent.

The Supreme Court may be open to these arguments. For example, Justices Stephen Breyer and Ruth Ginsberg's concurring opinion in one case (Nixon v. Shrink Missouri) worried about legislators using campaign-finance laws to "insulate themselves from effective electoral challenge." But the record in that case held no empirical evidence that the law actually entrenched incumbents, so the justices assumed that the legislators genuinely only wanted to prevent even the appearance of corruption.

And last year, in a case on Minnesota judicial elections (Republican Party of Minnesota v. White), the justices' questions in oral arguments indicated concern that campaign regulations protected incumbents from competition. Minnesota's state Supreme Court had forbidden state judicial candidates from discussing previous court decisions; Justice Sandra Day O'Connor objected that "the rule curbed challengers, while leaving incumbent judges free to express their views in the form of judicial opinions."

She explicitly noted the protection of incumbents when she said, "It's kind of an odd system, designed to - what - maintain incumbent judges?"

The plaintiffs challenging McCain-Feingold have a particularly strong case, as the evidence presented clearly demonstrates how such rules entrench incumbents. Indeed, given the importance the justices have placed on ensuring electoral competition, it is surprising that the Justice Department's defense of the law cited no evidence whatsoever to counter the plaintiffs' expert report.

No matter what the motives, noble or not, past federal and state campaign-finance laws have protected incumbents from competition and divorced voters further from the political process. More of these regulations will not help.

John Lott, a resident scholar at the American Enterprise Institute, served as an unpaid expert witness for the plaintiffs in the McCain-Feingold case.

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