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Hagel's 'soft money' limits fall in Senate

Sen. Chuck Hagel meets reporters on Capitol Hill  

Multiple votes on rival to McCain-Feingold bill bring high drama

WASHINGTON (CNN) -- The Senate cast aside the central portion of a challenge to the McCain-Feingold campaign finance reform bill Tuesday afternoon with a vote to "table" Sen. Chuck Hagel's $60,000 yearly limit on soft money donations.

The vote, which essentially killed the legislation on the floor, was 60-40, with the majority voicing its disapproval of Hagel's move to put an annual cap on soft money contributions.

"Soft money" is the term for donations made by individuals and corporations directly to the parties that are supposed to be used for so-called party-building purposes. Often, however, the money is used to influence individual elections and to circumvent other restrictions on campaign donations.

Hagel, R-Nebraska, said the $60,000 cap -- or $120,000 per two-year election cycle -- would rein-in those who might now be inclined to contribute vast amounts to the Republicans or Democrats. The McCain-Feingold bill, now in its second week of debate on the floor, would eliminate soft money altogether from the elections process.

Campaign finance reform
Status and summary of the McCain-Feingold reforms
Hagel's bill status and summary (from Thomas)

The vote capped a morning and early afternoon fraught with legislative maneuvering and some amount of nail-biting, as Hagel's controversial attempt to substitute the language of the McCain-Feingold bill was split into three sections, each of which the stewards of McCain-Feingold sought to table with a vote.

One of those sections survived when an overwhelming number of senators from both parties voted first not to table and then to approve a Hagel provision that would set in place stricter disclosure requirements for the sources of campaign contributions.

The disclosure requirements, which Arizona Republican John McCain, the force behind the McCain-Feingold bill, champions, survived the tabling motion 98-2 before the chamber agreed by voice vote to accept them as an amendment.

The Senate also tabled 52-47 a proposal that would have tripled to $3,000 the $1,000 "hard money" contribution limit -- money given directly to candidates by individuals.

With those key votes, the Senate dispatched what could have been the greatest challenge to the long-term prospects of the McCain-Feingold legislation, although its supporters acknowledge there will be more to come before a final vote is taken on the bill at the end of this week.

Two friends at odds

Hagel, who was the chairman of McCain's run for the GOP presidential nomination in 2000, offered his substitute measure on the floor Monday night, saying he opted to oppose his friend on the issue of campaign finance because he believed McCain-Feingold would gut a good system that was only in need of adjustments.

Sen. John McCain  

Speaking Tuesday, Hagel argued that should soft money donations be banned, those who could afford to would find a way to circumvent the system, while others would find themselves further locked out of the process.

"I believe [McCain-Feingold] is the wrong approach," Hagel said. "The intended consequences would weaken our political system at the points where it should be strongest. It would restrict the process to those who can afford to play outside the process."

Even the Senate's most entrenched opponent of any campaign finance reform, Sen. Mitch McConnell of Kentucky, stood up in favor of the Hagel substitute, saying it represented the best compromise between his camp and McCain's.

But McCain, Russ Feingold, D-Wisconsin, and their supporters blasted Hagel's legislative language, saying that it would take the election code loopholes they are now trying to close and make them law.

Direct corporate contributions, they pointed out, have been banned since 1907, while contributions from unions have been illegal since 1947.

Soft money, they said, allows large sums to be funneled to aid individuals running for national office through their party organizations, most often with the creation of issue advocacy advertisements that can be used to attack an opponent without ever making mention of the candidate's name.

"I must oppose this amendment because it preserves, indeed it sanctions the soft money loophole that has made a mockery of campaign finance law," McCain said. "I believe it is self-evident that contributions from a single source that run into the hundreds of thousands of dollars are not healthy to democracy."

Of the disclosure provisions approved by the Senate, McCain said they provided a "good foundation for bipartisan negotiation."

Hard money changes still possible

The subject of hard money increases may come up again before debate on the bill ends.

Senate Minority Leader Tom Daschle, D-South Dakota, said Monday he could support a compromise on doubling the $1,000 limitation on hard money. Daschle said he would be "reluctant" to do so but would in the name of passing the McCain-Feingold bill.

The compromise, first suggested by Dianne Feinstein, D-California, and Carl Levin, D-Michigan, would mean an individual donor would be able to give $2,000 in each phase of a two-year election cycle for a maximum of $4,000.

Republicans, including Sen. Fred Thompson, R-Tennessee, have proposed raising the current limit to $3,000, or a maximum of $6,000 per cycle.

CNN's Dana Bash contributed to this report.

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