General Practice, Solo & Small Firm DivisionMagazine
American Bar Association
General Practice, Solo, and Small Firm Division
The Compleat Lawyer
Spring 1997
copyright American Bar Association. All rights reserved.

Legislative Update

E. E. Anderson

E. E. Anderson, a retired general in the U.S. Marine Corps, is the director of the Solo and Small Firms Division of the ABA General Practice, Solo and Small Firm Division.

A New Congress

The 1996 elections preserved Republican majorities in both the House and Senate. In retaining control of the House, Republican numbers were reduced to 227, while Senate Republicans increased their numbers to 55. For the first time since 1930, Republicans obtained control of two consecutive Congresses.

Leaders in both Houses have identified a balanced budget and campaign finance reform as top agenda items for the 105th Congress.

They have indicated a desire for more bipartisanship, as opposed to the oftentimes acrimonious 104th Congress.

How well did the Republicans fare in the 104th with their "Contract with America" program? Much of their announced program was blocked by President Clinton or the Senate, but some significant bills were enacted into law. The Balanced Budget Amendment (H.J. Res 1) fell one vote short of passage in the Senate in 1995, but was three short in the vote in 1996. With the increase in Senate Republican membership, Senate Majority Leader Trent Lott (R-MS) will probably bring the measure to the floor of the 105th Congress in the very early days of the session.

The 105th Congress

Several areas of important legislation were not enacted by the 104th Congress and will probably be revisited in the 105th Congress. They include the previously mentioned product liability bill, Medicare and Medicaid changes, tax reductions and reforms, Superfund reauthorization, late-term abortions, term limits, and of course, a balanced budget amendment and campaign financing reform. Some of these items may be slow to reach the floors of both the House and the Senate, as the Republicans will undoubtedly hold oversight and investigation hearings to provide them time to examine the bureaucracy they would like to reduce, eliminate, or move to the states. While Republican efforts to eliminate the Departments of Commerce, Energy, and Education died in the 104th Congress, such efforts should be revived in the 105th Congress. One area that is bound to receive early attention is campaign finance reform.

Campaign Finance Reform

The 1996 presidential and congressional election campaigns evidenced unsurpassed sums of money being spent by labor unions, business groups, candidates, and their political parties. Until just before the election, the most talked-about fund was the $35 million in mandatory dues that the AFL-CIO earmarked for races against Republicans. Between January 1, 1995, and June 30, 1996, labor political action committees (PACs) also contributed $4.4 million to Democratic candidates, in contrast to the entire 1993-94 election cycle, when they contributed only $4 million.

Both political parties raised and spent more money on this election than in other previous federal campaign. Well over $1.7 billion was spent in the 1996 federal elections, and there appears to be no end. Some writers have said that members of the Senate must raise the equivalent of $10,000 a day to achieve reelection, and House members, $2,000 a day. Incumbents are clearly aware of the requirement to raise large campaign sums. In fact, in the past election, House members spent 72 percent of all funds expended in House races, and Senate members spent 60 percent of all funds expended in Senate races.

Of course, spending the most money does not ensure victory, as Michael Huffington's expenditures of $30 million on his 1994 unsuccessful campaign for the Senate in California proves. Nor did spending more than $10 million of his own money enable Mark Warner to defeat Senator John Warner (R-VA). Of the nine congressional candidates who spent over $1 million of their own money, five lost and four won.

Shortly before the fall election, the story broke that John Huang, a former Democratic National Committee official and an official in the Department of Commerce, was responsible for alleged Democratic irregularities in fund-raising. Huang, a former Lippo Group executive, solicited hundreds of thousands of dollars in questionable campaign contributions for the Democratic party. Mochtar Riady and his son James, Indonesian billionaires, head the Lippo Group, a Jakarta-based banking conglomerate with two U.S. subsidiaries, Lippo Group USA and Lippo Bank. Many of their U.S. subsidiaries and executives contributed vast sums of money to the Democratic National Committee.

The law generally bars foreign contributions, but they are permissible if the contributors are legally in the United States at the time the money is donated. The Riadys have had close ties to President Clinton since the late 1970s, when Clinton was Arkansas Attorney General. They became co-owners of a local bank with a close Clinton friend and have contributed to all of Clinton's campaigns. In fact, when an Indonesian friend of James Riady's was visiting the United States in 1995, he suffered a heart attack and Riady asked President Clinton to send his friend, Hasjim Ning, a get-well letter. Not only was this accomplished, but the letter was hand-carried to the hospital. As a consequence of their appreciation, Ning's daughter and son-in-law made a $425,000 contribution to the Democratic National Committee.

When the Huang story broke, the White House contended that only a handful of meetings with the Riadys and John Huang occurred, and were only social in nature. Subsequently, members of Congress requested that a Special Prosecutor be appointed, but the Attorney General declined. Initial investigations revealed that many meetings had occurred in the White House, and some talks with Clinton had been on Asian trade and other international political issues. As a consequence of the unfavorable publicity, the $425,000 contribution was returned, as well as other large and questionable foreign contributions.

During the 104th Congress, Senator John McCain (R-AZ) and Russell D. Feingold (D-WI) introduced a Campaign Finance Reform Act (S. 1219) that died a quick death in the Senate. The bill would have banned political action committee contributions and unregulated contributions to the political parties, known as soft money. Both McCain and Feingold vowed to introduce the bill on the first day of the 105th Congress. The version introduced in the 104th Congress did not address use by labor unions of membership dues for political advertisements and failed to confront contributions from foreign nationals. Their bill (S. 25) was introduced on January 21, 1997, and would limit contributions to those individuals who are eligible voters, thus preventing resident aliens, foreign nationals, and children from donating funds. Senator McCain wants a provision in the bill requiring labor unions to obtain signed waivers from their members before using dues for political purposes. Feingold would consider such a proposal only if it were coupled with a similar waiver from stockholders of corporations.

Soft money, or the unlimited funds that national political parties raise from unions, corporations, and other sources, became available after a 1979 law (P.L. 96-187) allowed political parties to raise money for voter registration drives and get-out-the-vote efforts. This soft money soon was being used for commercials supporting or opposing a particular candidate. The Supreme Court subsequently ruled that advertisements that did not specifically request a vote for or against a candidate were not subject to the restrictions of the federal election laws ( Colorado Republican Federal Campaign Committee v. Federal Election Committee, 116 S.Ct. 2309 (1996)). While campaign financing will be top on the agenda in the 105th Congress, opposition will continue from Senate Majority Leader Trent Lott (R-MS) and others who oppose such legislation. After Senate Majority Leader Dole (R-KS) resigned from the Senate, Lott allowed S. 1219 to come to the floor but McCain and Feingold failed to get the 60 votes needed to end debate and bring up the bill for a vote. However, in June 1996, Lott warned committee chairs that if they wanted leadership support, they should vote against cloture. His opposition is expected to continue in the 105th Congress.

Environmental Legislation

The Democrats have dubbed the Republican-controlled 104th Congress as the most anti-environmental Congress in history, while the Republicans contend they should be judged by the environmental legislation enacted into law. They say that their environmental accomplishments even surpass those of the Democratic-controlled 103d Congress. In the 103d, only one major environmental victory, the California Desert Protection Act (P.L. 103-433), was achieved. In the 104th, the Republicans, like their Democratic predecessors, failed to pass overhauls of the Superfund Hazardous Waste Law and the Endangered Species Act. They were, however, able to pass and have signed into law three major environmental measures: The Safe Drinking Water Act (P.L. 104-182), the Pesticides Act (P.L. 104-170), and the Sustainable Fisheries Act (P.L. 104-297).

P.L. 104-182 gave water systems more flexibility to zero in on local health needs and ordered systems to inform the public about contaminants in drinking water. While many environmental groups did not endorse the bill, they did like many of its provisions.

P.L. 104-170 overhauled pesticide regulations and achieved bipartisan support, although a few environmental groups thought the bill went too far in relaxing health and safety standards. The act created a uniform "reasonable risk" health standard for foods, replacing the 1958 Delaney Clause that barred processed food from containing even minute amounts of chemicals. The legislation sets unified guidelines for pesticide residues in both raw and processed foods. Also, states are prevented from establishing stricter guidelines than those issued by the federal government.

P.L. 104-297, the Sustainable Fisheries Act, revamped management of the nation's fisheries and had wide support from environmental groups. The legislation was designed to revive and protect the nation's threatened fishing industries.

Back to Top

< _