Campaign finance reform has become the Vietnam of domestic public policy. Just about everyone knows the fight is not winnable, but no one has figured out a way to bring it to an honorable end.

The paralysis began to settle in shortly after enactment of the campaign finance reforms of the mid-1970s. It has deepened with each election since. Small loopholes have grown into giant loopholes; campaign finance abuses have become an unhappy but unshakeable fixture of modern campaigns, like attack ads and sound bites. And as the laws have become more tattered, the prospects for a fix have grown more distant.

Reform has come to be seen by the public as a fool's game; new laws will simply produce new loopholes, so why bother? This resignation explains why the scandals of 1996 have failed to generate a groundswell for change. Despite all the headlines and hearings, Congress will bury campaign finance reform legislation once again this fall. It knows the public isn't paying much attention. And in the November election, it knows no incumbent will pay a price.

There's a temptation to finger Congress as the heavy of this piece. Its members cynically keep in place a system that got them to office and keeps them in office. Why change the rules of a game that's stacked in your favor?

But incumbent self-protection is only part of the problem. The bigger part is that the public is not mistaken. The United States system of money and politics cannot be overhauled. It cannot be "solved." It can only be managed.

Yes, it can be managed better than it's being managed now. But to get from here to there, it would help to de-escalate the rhetoric on the issue, acknowledge the strengths as well as the weaknesses of our political culture, and confess that a magic cure does not exist. Perhaps then it will be possible to muddle toward a marginally better system. And then - as a wise man once proposed during the height of the Vietnam War - to declare victory and get out.

In that spirit, here are some seat-of-the-pants "truths" about money and politics that never get enough ventilation.

The United States political system is not fundamentally corrupt. You want corruption? Take a world tour of kleptocracies from Albania to the former Zaire. Check out the cozy relationship of money to power in the capitals of Russia, Japan, Italy, Mexico, Indonesia and China. Rummage through the pages of our own history, from the Robber Barons to Teapot Dome. What makes us better, now? We enjoy the world's most robust culture of transparency. Our democratic habits demand it; so do our financial markets, so does our information revolution. Where transparency reigns, corruption withers.

Does money nonetheless buy access and influence? Of course. The federal government gets and spends nearly $2 trillion a year. It makes policy that steers the way trillions more are gotten and spent in the private sector. Money would have to be crazy not to want to march into the temples of government and tilt the scales in its favor. And money is not crazy.

There will always be a tension between the truth that a capitalist economy thrives on inequality, and the truth that a democratic polity depends on equal representation. The Supreme Court, in its landmark 1976 campaign finance ruling, Buckley v. Valeo, grappled with this tension and came down with what many regard as an unwise, split-the-baby-in-half compromise.

It said that Congress cannot limit campaign spending, for spending money on politics is a form of constitutionally protected speech. It said Congress could restrict the size of campaign contributions, on the theory that the government has an interest in preventing corruption or the appearance of corruption. This ruling has helped create the mess we're in today. But the heart of the problem is not the court decision. The heart of the problem is that when core values collide, things will always be messy.

The result is that we have a campaign finance system that is regulated, but only partially. You want to give money to a candidate? There are limits. You want to give money to a party? There are limits (and loopholes), but there are no limits on how much money a candidate or party can spend. There are no limits on how much a candidate can give to himself or herself. And there are no limits on how much you can give to an independent group, which can in turn use that money to run ads that help elect or defeat the very candidates to whom you can only give a limited amount of money.

Understand all that? Neither do most people. But money does, and, as former Clinton adviser Harold Ickes Jr. put it, "money always finds a crack." In the generation since Buckley, the

cracks have gotten wider, the regulations thinner, and the public's faith in the integrity of the system shallower.

What to do? Proposed solutions come from one of three camps - the deregulators, the overhaulers and the tinkerers.

The deregulators say the current system forces candidates to spend long, unseemly stretches of time chasing money in small dollops. Better to remove all limits and rely on disclosure to let the voters figure out on Election Day if anybody's on the take. The trouble with this prescription is that each election year, the public would be pummeled with a barrage of "scandal" stories about who is writing six and seven figure checks to whom, and why.

Would the public take the time to sort it all out? Or would the public shrug its shoulders, remind itself that politics is a closed game for monied interests, and go fishing. That's been the dominant public response for the past generation. Deregulation would make it worse.

The overhaulers want to go in the opposite direction. They say the only way to clean up the system - the only way to assure that inequalities in the marketplace don't translate into inequalities in democratic representation - is to provide full public financing to political candidates.

That's the heart of the case made in "Dollars and Votes: How Business Campaign Contributions Subvert Democracy," by Dan Clawson, Alan Neustadtl and Mark Weller (Temple University Press, 271 pages, $19.95). But the overhaulers over-promise. They imagine that by providing public resources in an equitable way to all candidates, our campaign finance system can assure that the wealthy will not have undo influence on public policy; that campaigns will become more competitive; and that elected officials will be freed to spend their time pondering issues instead of raising money.

All these assertions are persuasively refuted by Michael J. Malbin and Thomas Gais in "The Day After Reform: Sobering Campaign Finance Lessons from the American States" (The Rockefeller Institute Press, 194 pages, $16.95). Malbin and Gais examine what has happened in the 22 states that have adopted some form of public financing with spending limits.

They marshal evidence to show that monied interests invariably adapt and redeploy; that spending limits do not make politics more competitive; and that the recent explosion of unregulated campaign advertising by outside groups wreaks havoc on proposals to limit spending by candidates.

That leaves the tinkerers. They - we - say that certain loopholes in the current system can and must be closed, such as unlimited "soft money" contributions to political parties. We say that certain targeted reforms would help open up the system, such as free candidate air time and tax credits for small contributions. We say that the formula for building a better campaign finance system is to build new floors, not new ceilings - because the key to making politics more competitive is not how much money the incumbent has, but whether the challenger has enough to get a message out.

If we do all this - and there's not much hope that Congress will do any of this - then our system of money and politics will still be messy. But it will be better than it is now. And we won't have touched off another cycle of over-promising, followed by disillusion, followed by disengagement.

Paul Taylor, a former political reporter and foreign correspondent for the

Washington Post, is the director of the Alliance for Better Campaigns, a non-partisan public interest group.

Pub Date: 7/26/98