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What Clinton and Dole could learn from the Teamsters.

My favorite goo-goo reformer was Jackie Presser. Corrupt as the late Teamsters boss probably was, he practiced a form of good government that Bill Clinton and Bob Dole ought to imitate. That's because when it comes to political fundraising, the Teamsters' operation is, financially speaking, not only cleaner than the campaign finance efforts of either the Democratic or Republican party, but stronger at the grassroots level. Sure, there are plenty of worthy campaign finance reform plans floating around Washington these days, but the one the truckers cooked up is the best I've seen yet.

The Teamsters' system comes down to four words: a buck a week. While the national parties have become exclusive clubs for big donor lobbyists, corporate executives, and millionaires, the Teamsters' political action committee (PAC) is supported almost exclusively by rank-and-file members who voluntarily donate just one dollar every week directly from their paychecks. Using this democratic device, Presser, bless him, built the Teamsters' PAC into the mightiest political war chest of them all. But this system does more than merely raise steady and staggering sums. If the buck-a-week plan were applied to national campaign finance, it would connect the parties to the people, and more importantly, take a bold step toward limiting the excessive influence of special interests. And it's a reform that is relatively inexpensive to implement and could be enacted regardless of what happens to more controversial proposals, such as spending limits, taxpayer subsidies for congressional candidates, or the elimination of PACs.

Of course, none of this is intended as an endorsement of the Teamsters' PAC, or any other. (PACs are just the kind of special interest groups whose influence needs to be reduced, because they spend their money to buy access and push self-serving legislation at the expense of the rest of us.) But it is an endorsement of the way in which the Teamsters raise their political funds. "A broad-based PAC is the closest thing to real democracy there is," says David Sweeney, the Teamsters' legislative director. "When little people get together to pool their bucks, that's what democracy is all about." It's hard to argue with that.

It's also hard to argue with the need for some fresh ideas. Congress has waffled for years on campaign finance reform. And Clinton has recently shied away from some of his tougher campaign rhetoric on the issue. Democrats and Republicans remain miles apart on the issue, and Republicans can probably block any purely partisan plan with a Senate filibuster. But the public has grown weary of lobbyists and special interest money. The time has come, I humbly submit, to give the buck-a-week plan the heating it deserves.

Dollar bill

Here's how it works: Any Teamsters member who wants to give to the PAC signs a form, which goes to his employer's payroll office. The money is then deducted from the member's paycheck, along with union dues, taxes, and the rest. The Teamsters have worked this out through collective bargaining, but it would be a relatively simple matter to set up a similar system for political parties through legislation. All employers would offer voluntary payroll withholding for employees who want to make donations to political parties. The IRS would collect the money for parties just as it now administers payroll withholding for federal income taxes, Social Security, and Medicare.

This one swift measure wipes out a number of problems. Under the current system, only a small elite can afford to give $1,000 to a political candidate, the legal maximum at the federal level. Just a handful of millionaires and big corporations can afford to give $100,000, the standard unit for those unregulated "soft money" donations to the parties.

Despite the high entry fee, there are plenty of players. At the pinnacle of the Republican party finance machine, for example, is "Team 100," a coterie of real-estate developers, Wall Street dealmakers, and other rich folks who funnel $100,000 checks to the Republican National Committee. (Some, coincidentally, were made ambassadors by President Bush.) Not to be outdone, Ron Brown, during his stewardship of the Democratic party, set the price of admission to the DNC's "Managing Trustee" program at $200,000. Brown, formerly a wealthy special interest lobbyist himself, is now in the Clinton cabinet, and "managing trustee" Pamela Hartman has been nominated to become U.S. ambassador to France.

And it's not just ambassadorships at stake. Consider Dwayne Andreas and the company he heads, Archer Daniels Midland. It gave nearly $1.1 million to the Republican party during the 1991-1992 election cycle and $277,500 to the Democratic party. Andreas and his company may, of course, be as interested in good government as the next guy, but they are also keen to make both Democrats and Republicans aware of the importance of continuing the generous taxpayer subsidies that help create an artificial market for ethanol, of which Archer Daniels Midland is the nation's main supplier. Ethanol, by the way, was just exempted from the Clinton administration's proposed energy tax--which in effect gives it an even bigger subsidy than it now enjoys relative to other fuels. Is that all because of politicians' eagerness to appease Midwestern grain farmers, or did Andreas's enormous political contributions help?

It's not fair, of course, to single out Andreas. The United Steelworkers of America gave $403,051 in soft money to various Democratic committees during the past two years. The United Auto Workers gave $235,300. Do those donations have anything to do with Democrats' increasingly protectionist approach on trade issues? And the National Education Association gave the Democrats $415,000. Any connection to the party's reluctance to shake up ossified public school bureaucracies? The tobacco lobby likes to give to both parties. R JR-Nabisco gave $502,955 to the Republicans and $321,000 to the Democrats. Similarly, Philip Morris gave $484,580 to the GOP and $222,500 to various Democratic committees. U.S. Tobacco gave $409,674 to Republicans and $125,346 to Democrats. The Tobacco Institute gave $125,477 to Republicans, $137,275 to Democrats. Any odds on whether Congress will raise tobacco taxes by more than a token amount, even to pay for health coverage? It's these kinds of questions we shouldn't have to ask.

But more and more, the public is asking exactly these questions. In fact, disgust with big money politics goes a long way toward explaining the popular disillusionment with political parties. How else to account for Ross Perot's 19 percent of the vote last year, even though he was widely thought to be a bit loony? Or that Jerry Brown, a born-again state party chairman, was able to outlast all Democrats but Clinton in the primaries by marketing himself with an 800 number and a nothing-over-S100 donation policy? Unfortunately, party professionals are so addicted to big money politics that they claim all "party building" voter contact will stop without it. They fail to grasp that big money is killing the parties, not building them. Democratic and Republican party apparatchiks, instead of catching on to the power of the Perot/Brown messages, keep practicing a perverse twist on Robin Hood--sucking up to the rich to pay their own salaries.

The buck-a-week plan, on the other hand, would give the public the type of democratic politics it demands and deserves. And it would create a powerful incentive for parties to reconnect with voters by expanding person-to-person, grassroots organizing efforts. With a payroll withholding system in place, the parties would be eager to get citizens to sign up as members. And that would require not fancy lunches with corporate execs, but door-to-door sales to convince average voters that the party is on their side.

The parties might imitate the successful door-todoor technique used by the public interest group Citizen Action, which claims about 3 million members in 32 states. "It makes a difference when somebody shows up on the doorstep who's obviously committed," explains Robert Brandon, Citizen Action's national executive director. "People are appreciative of the information you give them, and the fact that somebody is out there fighting the good fight." As a result, Citizen Action is closer to the voters than either party. "Take health care, for example," says Brandon. "We've been canvassing and working on this issue for the last eight years." Democrats didn't discover the election-winning potential of that issue until the Pennsylvania special Senate election in 1991--and George Bush never caught on.

Such a door-to-door technique meshes nicely with the type of organizing the party professionals claim they now aspire to. Citizen Action "is not a bad model for us," the new Democratic party chairman, David Wilhelm, told Rolling Stone recently. "They are everywhere. They knock on doors and say to people, 'Look, this is what we care about. Will you become a member of our organization?'"

That personal contact with voters would make it profitable for parties to emphasize positions that ordinary citizens see as appealing, sensible, and relevant to their lives. Do voters want health care reform? A fix for urban schools? The party with the most appealing plans would raise the most money, and get the most votes. "They would have a selling job to do," says the Teamsters' Sweeney. "They would have to convince the citizenry that they were about doing good."

Pac it in

The worst part of today's system is that it practically forces parties and candidates to rely on a narrow elite. That's because big donations cost little to raise; those fatcat dinners consume only about a nickel of every dollar they generate. Small donations are much more expensive because raising them requires mass mailings and telemarketing, gobbling up perhaps 40 percent of the typical $50 check. And unfortunately, matters are growing worse each year because direct mail is becoming more expensive and less effective. As things stand, a party that receives a $1 gift is actually losing money, because it costs more than $1 to process.

The buck-a-week payroll plan, however, would radically change those economics. Thanks to the payroll withholding plan, the payoff from a successful fundraising appeal would be a steady stream of income--$52 a year from each donor--that would roll in automatically, steadily, dependably. The handling costs would be nominal. Companies withholding money for the Teamsters' PAC, for example, send a bill for their added payroll processing costs. "When all is said and done, [administration costs] might be between $75,000 and $100,000 a year," says Sweeney. That's roughly two cents of every $10.

The largest cost involved would be organizing efforts to convince citizens to give in the first place--in other words, selling the party platform across the country. But using Citizen Action again as a model illustrates how real party building can actually pay for itself, and then some. The group fields about 1,000 canvassers year-round. In summer, the door-to-door army grows to about 1,800. And those organizers sign up more than enough dues-paying members to pay their own salaries, which are generally under $300 per week, plus bonuses based on performance.

And while the costs of raising and collecting the money would be minimal, the amounts raised could easily match those hauled in through the current big donor system. Consider the Teamsters' PAC, which is officially called the "Democratic Republican Independent Voter Education Committee" (DRIVE). Before Presser began pushing the payroll plan, DRIVE was stuck in neutral: Despite a union membership of 1.9 million, the truckers had contributed a paltry $244,331 to DRIVE in the two years leading up to the 1980 elections. The buck-a-week plan radically changed that. In the 1990 elections, DRIVE raised $10.5 million even as the number of Teamsters steadily declined. In the 1992 elections, with the economy sagging and total Teamsters union membership dropping to fewer than 1.5 million, the PAC managed to raise $9.4 million for the two year cycle--still the King Kong of PACs.

If the Teamsters can raise nearly $10 million every two years from a base of 1.4 million members, think what the Democratic and Republican parties could do with their much broader bases. Currently, there are nearly 189 million Americans of voting age, and about 38 million adults consider themselves strong Democrats. If the party can convince just 5 percent of those strong Democrats to give a buck a week, it would bring in nearly $200 million every two year election cycle. That's far more than the record total that all parties' national committees received in the last election from all sources combined. And the donation rate might even turn out to be higher. About 7 percent of Teamsters members choose to give to its PAC. And the United Auto Workers gets about 27 percent of its members to give to its PAC through a similar buck-a-week checkoff system. Democrats could conceivably push the contribution rate high enough to get rid of funding from millionaires, PACs, corporations, and labor unions--and still have plenty left to take over full funding of all the general election campaigns of its candidates for the House and Senate, fleeing the candidates from the need for special interest money. Campaign finance nirvana would be at hand.

The Republicans have already moved in this direction by persuading many of their regular donors to allow the party to make an automatic, periodic debit to their personal checking accounts, just the way many people now make their mortgage payments.

Party professionals might be surprisingly willing to give up soft money if only they had an attractive alternative. Besides all the bad publicity that soft money brings, there's the generally unappreciated fact that it's a headache to use. It can only be spent legally for such indirect activities as compiling voter lists and buying generic commercials that say "vote Democratic" or "vote Republican," without naming any candidates. On the other hand, small donations that comply with the federal limits can be used in direct support of the party's candidates for Congress or the White House.

Cash cowed

Not only could the buck-a-week plan make it easier to get rid of soft money, but it would pave the way for, and ideally be combined with, other reforms as well. The major barrier to getting rid of PACs, for example, is that they currently supply so much of the campaign money incumbents spend. For example, PACs gave more than half the reelection money of the Democrats who control the House, including $1.2 million in the last election to House Majority Leader Richard Gephardt. But if parties had an ample supply of clean money from rank-and-file members, politicians might feel less horrified about giving up existing sources of money.

In addition, many Republicans see no problem with a 100 percent federal income-tax credit for small political donations, even though that would represent a substantial federal subsidy for House and Senate campaigns. So, if Congress won't go for serious public financing, why not couple the buck-a-week plan with a 100 percent tax credit capped at $52 annually? Give a buck a week to your party, get it back in your tax refund check. Any party that can't market a deal like that deserves to lose elections.

The buck-a-week plan would, of course, face some minor obstacles. "You would have very, very strong institutional resistance within the IRS," predicts former IRS Commissioner Fred Goldberg. Adding more lines to tax withholding forms clutters them and costs money, he says. But "mechanically, it can be done." Organized labor might squirm at the idea of sharing the payroll mechanism--a political golden goose if there ever was one--with parties. Business groups would object reflexively to another federal mandate and small businesses in particular would seek an exemption, claiming paperwork headaches. A few liberals still equate the notion of strong parties with Tammany Hall corruption. Lawmakers of both parties may secretly want to keep parties weak, allowing themselves more freedom to maneuver. Careful drafting would be needed to deny the benefit of the payroll plan to kooky fringe groups trying to claim political party status while still recognizing the legitimate claims of bona fide minor parties, such as New York's Liberal and Conservative parties.

Such objections, however, pale when set against the major attractions. There could be lots more money for both parties. Stronger parties mean relatively weaker special interests. Perverse incentives would be reversed, and parties would find it profitable to behave more like public interest groups. Candidates could shift the humiliating and time-consuming task of fundraising to party professionals. Better candidates would run for Congress if the parties provided enough money, and they would stand a better chance of winning. In fact, the buck-a-week plan would be worth trying even if no other reforms are enacted.

Would it work? There are no guarantees. (Perhaps parties have nothing worth a buck a week to offer voters.) But Bob Beckel, a Democratic bigwig and former Mondale campaign manager, says that he, for one, is ready to give it a go: "Maybe we have to say this soft-money thing is so bad and so insidious, we just have to roll the dice ."

So, Bill Clinton, Bob Dole, anyone out there: Steal my idea. Why not? I stole it from the Teamsters myself.
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Title Annotation:payroll deduction plan to reform political party finance
Author:Jackson, Brooks
Publication:Washington Monthly
Date:May 1, 1993
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