But a report by the nonpartisan Committee for the Study of the American Electorate concludes that spending limits would hamper challengers more than incumbents:

• Spending limits could prevent less known challengers from getting their message out.

• Gerrymandered districts are more helpful in securing incumbents' reelection than their unlimited spending, and challengers must spend more to overcome that advantage.

• Limiting spending by candidates would drive money into less accountable places, such as independent expenditures outside campaign organizations.

Another study from the University of Chicago Law School compared campaign spending for decades of state and federal legislative races and gubernatorial campaigns to levels of government spending for the relevant offices.

After adjusting for various factors that might affect campaign spending, it found that between 60 and 80 percent of the growth across time in campaign expenditures can be linked to increased government spending.

The amount of campaign spending is an important factor in winning elections, despite the 1974 campaign finance reforms.

• In 1994, 91 percent of incumbents standing for reelection won.

• Real campaign spending has increased by 180 percent since 1976.

• In 1994, two-thirds of winning House challengers were already spending more than the proposed Congressional limit -- an average of $738,117 -- as were 65 percent of winning Senate challengers.

Such groups as the American Conservative Union and the American Civil Liberties Union oppose spending caps, and many scholars think the Supreme Court would strike them down as an unconstitutional limitation on speech.

Sources: Michael Janofsky, "Report Opposes Low Spending Caps," New York Times, June 21, 1996; and Brian Doherty, "Common Causes: Bigger Government Equals More Money Spent On Campaigns," Reason, April 1996, Reason Foundation, 3415 Sepulveda Blvd., Suite 400, Los Angeles, CA 90034, (310) 391-2245.

• Five-time presidential candidate Lyndon LaRouche has received millions of dollars from the fund for his campaigns -- even the one he ran in 1992 from federal prision after his conviction for fraud.
• Since LaRouche is President Clinton's only primary opponent in most states this year, Clinton could receive over $15 million to vanquish LaRouche in the Democratic primaries.
• Three-time presidential candidate Lenora Fulani, of the "New Alliance Party," has received $3.5 million from the taxpayers for her campaigns.
• The fund will also pay out nearly $25 million this election year to subsidize the Republican and Democratic conventions.

Source: Senator Mitch McConnell (R-KY), "Don't Waste Your Money," USA Today, February 16, 1996.

The theory is similar to the policies by which the Securities and Exchange Commission regulates the stock market. Most government oversight of the markets simply makes sure that publicly traded companies accurately disclose vital information about their finances. The theory is that buyers, given the information they need, are intelligent enough to look out for themselves.

Applying the same philosophy to campaigns, a well-informed electorate -- rather than federal bureaucrats -- should be the judge of whether someone has accepted too much money from a particular interest group or spent too much.

• Disclosure laws would be strengthened or broadened, and penalties for failure to disclose would be ratcheted up.
• A high reporting threshold -- between $25,000 and $50,000 per election cycle -- would be established, so as not to burden benign small-scale advocacy.
• Fund-raising restrictions would be relaxed, since the maximum legal contribution by an individual to a federal candidate -- $1,000 per election -- is now worth only one-third as much today as when it went into effect in 1975.

We cannot outlaw special interest money, reform advocates contend, but we can raise the penalties for accepting dubious contributions via the court of public opinion.

Source: Larry J. Sabato (University of Virginia) and Glenn R. Simpson (Wall Street Journal), "Campaign Reform: A Better Way," Wall Street Journal, June 14, 1996.