Stations Would Help Fund Political Ads Under Proposed Rule
Broadcasters would face a tax on revenues to pay for presidential and congressional candidates’ political advertising under a congressional proposal aimed at bolstering campaign finance reform.
“This would cost [broadcasters] a ton of money, but they make a fortune on candidates,” Sen. Dick Durbin, D-Ill., a sponsor of the Fair Elections Now Act, said today at a hearing of the Senate Rules & Administration Committee. “The broadcast industry does quite well. To ask them to play a part in this is quite reasonable.”
The bill, also sponsored by Sen. Arlen Specter, R-Penn., Sen. Russell Feingold, D-Wis., and presidential candidate Sen. Barack Obama, D-Ill., would extend public financing of campaigns from presidential candidates to congressional candidates, but in limited fashion. It proposes that qualified congressional candidates get vouchers usable toward broadcast ads.
Providing the money for the ads: A 2% tax on stations’ gross advertising receipts.
The proposal, which is in very early stages of congressional consideration, already is attracting strong opposition from broadcasters.
In addition, some Democrats and Republicans are questioning whether public financing could provide too much exposure for fringe candidates, or whether it’s even desirable.
Besides the 2% tax, the legislation could have several effects on stations.
--It would tighten requirements that stations sell candidates ads at the lowest unit charge paid by any advertiser. Candidates contend that stations boost election time rates to avoid some of the impact and further evade the requirement by creating a higher separate “lowest unit” charge for non-preemptable spots. Candidates who want assurance their ads will air before the election end up paying the non-preemptable rates. The legislation would bar stations from preempting any spots purchased by federal candidates.
--The legislation would let candidates and political parties buy time at a rate 20% below the lowest unit charge near an election and would let more party committees buy at the lowest unit charge.
David Rehr, president-CEO of the National Association of Broadcasters, today wrote to committee chairman Sen. Dianne Feinstein, D-Calif., calling the legislation “of great concern to broadcasters” and warning that it could impact the ability of other advertisers to buy TV time during elections.
Senate Minority Leader Mitch McConnell, R-Ky., said all the major presidential candidates this year have rejected public financing. He also called public financing a Watergate-era idea that has proven not to be desirable.
Sens. Durbin and Specter defended the legislation.
Sen. Durbin said broadcasters in the top 10 markets have been making a 45% return at the same time candidates have to spend more and more time raising money to support advertising.
“The current system is unsustainable,” Sen. Durbin said, adding that it forces candidates to spend so much time with the wealthy trying to raise money that “we don’t spend enough time with the average working people.”
Sen. Specter called the legislation “a modest first step” that is aimed at dealing with the skepticism of the American public that candidates are for sale.