A New Day Dawning

By NANCY GIBBS AND KAREN TUMULTY

For years, John McCain had imagined how the Last Battle would be fought, how he would be tested if campaign-finance reform actually came to a vote on the floor of the U.S. Senate. Ever the rebel among his risk-averse peers, McCain would have to do some things he had never been much good at, cut some corners, play the inside game, be a dealmaker--be more like them in hopes of making them more like him. And then, once he had bullied and cajoled and converted his colleagues, he would have to do something even harder. He would have to trust them. And that's what finally happened last Wednesday afternoon, when a big, messy coalition of reformers from both parties gathered in the Lyndon Baines Johnson Room to decide whether to hold hands and jump off the cliff together. As McCain entered the summit early Wednesday afternoon, the size of his gamble scared him, and he wondered if he'd misplaced his faith. "When I walked in that room and sat down, I didn't think our chances were very good," he says.

By the end of the day, however, the chances looked considerably better; the two sides agreed to increase the amount of hard money individuals could give candidates and parties, and that compromise paved the way for the historic vote to ban the unlimited soft-money donations that parties could collect from corporations, unions and the wealthy. By the end of the week the Arizona Senator, his sidekick, Russ Feingold of Wisconsin, and their merry band of china breakers actually had victory in sight--a victory that could lead to the most dramatic campaign-finance overhaul since the post-Watergate reforms of 1974. McCain-Feingold's reforms are so sweeping, in fact, that no one can be sure of what will happen after this week. The House will get its turn, and there are lots of anxious lawmakers on both sides who have reason to kill the bill before it kills them. Then President George W. Bush has to sign it. (He has hinted he will.) Finally, the courts will have to rule on the legal challenges that reform opponents are already drafting, particularly to a provision that would limit political advertising by independent groups like the N.R.A. and the Sierra Club in the last weeks before an election.

But the big question is this: If the bill becomes law, will it truly disinfect our politics? The end of Clinton's presidency and the launch of Bush's were a parable for reformers, between the pardons for Democratic fat cats and the environmental policy clout of Big Business. But like a virus, political money has a way of mutating so it spreads in any environment. Be careful what you wish for. The cure may be worse than the disease. "This is a stunningly stupid thing to do, my colleagues," Kentucky's Mitch McConnell said on the Senate floor, "and don't think there's anyone out there to save us from this."

For McCain and Feingold, who brush aside such alarms, it was a moment for celebration, and not only because they were poised to win a lonely battle they had fought for years. The two weeks of debate that ended Friday surprised many veterans of the Senate's joyless forced marches. The debate was both civil and principled; people listened, and some even changed their mind, persuaded by new arguments and old loyalties to make a leap of faith. No one knew as the week went on how it would turn out; every day brought another threat to the bill's survival, and the best head counters in the chamber were stumped about who would act as saboteur, who would turn out to be a savior.

McCain and Feingold thought they had a good idea who their enemies were. McConnell never pretended to see the smallest merit in anything they proposed. To him the debate is a basic free-speech issue: if people want to spend their money supporting candidates or making TV ads about a candidate's environmental record, that is their prerogative. But as the week began, it was not McConnell who posed the greatest threat. It was, of all people, Minnesota Democrat Paul Wellstone, the most earnest, make-the-world-a-better-place Senator of all.

If you really want to reform the system, Wellstone argued, you can't just shuffle the money from parties to outside groups. It wasn't enough to limit issues ads by unions and corporations in the last weeks of a campaign; he proposed extending the limits to all advocacy groups, from the Christian Coalition to the Feminist Majority Foundation. But any limit on political speech makes First Amendment purists queasy, and his amendment, reformers feared, would never pass constitutional muster. And that might one day be all it would take to kill the entire bill--if the Senate passed a "non-severability" amendment, the great deal breaker that meant that if any part of the bill was ruled unconstitutional, the entire thing would be thrown out. Wellstone's amendment was so constitutionally dubious that it invited the courts to strike it down--and, potentially, the whole soft-money ban along with it. For McConnell, that made it perfect.

The wooden benches with the red velvet cushions in the back of the Senate chamber are where staff members sit for hours, partly to follow the debate, partly because it's the best place to pick up intelligence. Mark Buse, 35, has been doing that job for McCain for 17 years. He became so adept at rooting out legislative pork that McCain calls him "the Ferret." Listening to other staff members gossip on Monday afternoon, Buse picked up his first hint of trouble. Both McConnell and Texan Phil Gramm, another reform foe, were going to vote with Wellstone. Why would Gramm and McConnell vote with a liberal? Suddenly Buse understood: Wellstone's amendment was a poison pill, with the potential to kill the whole measure. He rushed to warn McCain.

McCain knew the worst was happening when he came into the Senate chamber for the vote. "Gramm was standing down in the well, grabbing people and talking to them, going back into the cloakroom," he says. And it wasn't just fellow Republicans plotting against the bill. McCain and Feingold realized that some Democrats privately wanted to see the bill die. It had been easy to support in the past, when it had no chance of passing. But in the 2000 election the Democrats had become as slick as the Republicans at raising soft money; do away with it, and all that would be left is hard money, where the G.O.P. still holds a big advantage. Some Democrats approached McConnell quietly, he told TIME, with private pleas to "stop this from happening" and "pull some rabbit out of the hat one more time." Wellstone's amendment was the ticket. "I viewed it as another unconstitutional ornament we could put on this tree," McConnell says. "I was trying to get as many problems into the bill I could, so that if we ended up in court, we had a target-rich environment." He went to colleagues and said, "This is grotesquely unconstitutional. Please vote for it."

In the end a strange alliance of pro- and anti-reform purists--27 Democrats and 24 Republicans--passed Wellstone's amendment. Never the most skilled inside player, McCain realized he had been blindsided. He began to suspect that even Democrats who had voted with him, like minority leader Tom Daschle, were secretly against him. The next morning, as he boarded the little subway train that runs between the Senate office buildings and the Capitol, McCain was muttering, as much to himself as anyone, "Game face on..."

If on Monday McCain was killed by a friend, on Tuesday it was his turn to kill one. Chuck Hagel of Nebraska, fellow war hero, was one of the only Senators at McCain's side during his ill-fated presidential bid. Yet now he was the one standing in McCain's way. Hagel was sponsor of an alternative bill that instead of banning soft money would limit it: his measure would allow couples to donate $540,000 in each two-year election cycle to candidates and parties, not much of a brake on the current system. McCain and Feingold knew that Hagel had the quiet encouragement of the White House and that if his bill passed as proposed, theirs was as good as dead.

As it turned out, Hagel did McCain and Feingold a favor. He knew there were Senators who didn't like all of his bill, and he feared being outmaneuvered; so he divided it into three parts and let the Senate vote on each. At first Feingold and McCain wondered what he was up to. "Then I realized, oh, this is great!" Feingold recalls. "We're going to finally get the vote we've been wanting to have for five years--up or down on soft money. That was the turning point."

As the roll call proceeded and the number of Senators voting to reject Hagel's soft-money provision grew, McCain and Feingold headed to the press gallery, and Feingold checked with the clerk. It was 59 to 40, with one Senator out.

"Who is it?" he asked.

Joe Lieberman. "My fists went up in the air, and I went '60'--the magic number, a filibuster-proof repudiation of the soft-money system," Feingold says. "Some tough things happened after that, but that was when we showed we had control of the Senate on this bill."

On the same day the Senators also knocked back Hagel's proposal to triple the amount of hard money individuals could give, but by a much narrower vote, 52 to 47. That gave the reformers their road map. The votes to ban soft money were there, if they could find the right formula for increasing the $1,000 hard-money limit, which hadn't changed since 1974. McCain and Feingold had to come up with a hard-money deal, and quickly.

It was going to be an excruciatingly delicate negotiation. Some Republicans said they could live without soft money if the hard-money limits were tripled, as Tennessee Senator Fred Thompson, a McCain ally, proposed. But some Democrats would never go that high. Dianne Feinstein of California had proposed $2,000, and Daschle had made it clear that was the absolute maximum he could accept.

On Wednesday morning McCain and Feingold orchestrated matters to produce precisely the same number of votes for the Thompson and Feinstein proposals, to force both sides to the table while assuring they were on exactly equal footing. The summit was supposed to last an hour and a half, but stretched on for three. "Outside of Vietnam, I don't think John's ever been in a room for three hours," adviser John Weaver said dryly.

The half a dozen Republicans sat on one side, the Democrats on the other; their anxious staffs were reduced to bringing in sandwiches and staying out of the way. For a long time neither side budged. The Democrats, Thompson feared, were going to walk, and he was ready to go back to the floor to lambaste them for killing the deal.

The breakthrough came from an unlikely source--G.O.P. Senator Don Nickles, who had long been among the bill's enemies but who wants to become the next majority leader. He showed leadership Wednesday on the issue of how much, in total, an individual could give candidates and parties in a year. The Republicans were holding tough at $50,000, the Democrats at $30,000. "Let's just split the difference," Nickles finally said--not quantum physics but enough to get them talking. Eventually they agreed to $37,500.

They were so, so close. The Democrats slipped into the chamber to huddle with a visibly tense Daschle. Back in the L.B.J. Room, Thompson proffered one last piece to seal the deal: the G.O.P. had moved much further on the hard-money limits; if the Democrats would index the limits for inflation, they had a deal. Feinstein shot out of the room to take the offer to Daschle, and for a few final moments the Republicans waited. When the deal was done, Thompson grabbed his throat with both hands, mock-choking over the compromise he had struck.

The reformers rushed to the floor, for fear the compromise would spoil if left too long. But the vote was a slam dunk, 84 to 16--even McConnell voted for it, saying he considered the increase in hard-money limits "a step in the right direction."

Thursday had always promised to be an ordeal. The finish line was in sight, but it was guarded by a grizzly--the non-severability amendment that, if passed, would throw all their hard work in doubt. Throughout the week the bill's opponents watched McCain rack up victories, knowing they had this last weapon. But McCain had 150,000 weapons of his own: e-mail correspondents who were kept abreast of the bill's progress and told which Senate offices to barrage with calls and e-mails. On Thursday they made sure that 20 Senate office switchboards were lit up all day. McCain's Straight Talk America cyberoperation would put out an alert if a member was wandering off the reservation. "Literally, within an hour, we'd have complaints on the Senate floor" from the Senator in question, says strategist Rick Davis. Illinois' Dick Durbin, whose vote was in question, at one point came up to McCain on the floor and, according to Davis, said, "Look, I'm going to vote with you guys. Tell your people to cease and desist."

But until the final vote on non-severability Thursday afternoon, McCain and Feingold didn't know if they had the votes they needed to kill it. Seven or eight Democrats were worried that if the courts threw out the limits on independent issue ads, lawmakers would be left without the soft money they need to fight back. The tally was expected to be very close--a pro-reform lobbyist was counting 51 votes on his side--and there was even speculation that Dick Cheney might come in to break a tie. But at last, once it was clear the reformers would prevail, wavering Senators climbed aboard. That, many reformers agreed, was a tribute to Daschle, who in the end earned McCain's trust and kept most Democrats in line. "This was truly Daschle's day," said Fred Wertheimer of Democracy 21. "McCain is entitled to his credit, but the Democrats supplied the votes."

McConnell accepted defeat and warned his colleagues what the new world might look like. "This is mutual assured destruction of the political parties," he said. "There won't be one penny less spent on politics it just won't be spent by the parties." Instead, he predicted, there would be a "battle of billionaires over the political discourse in this country" as power was transferred from the parties to the press, academia, Hollywood and the richest individuals. He says half a dozen Democrats came up later and said they were stunned by what they had done to their party.

Cindy McCain sat in the gallery high above the action. On the floor her husband was so happy that he looked close to tears. Feingold, not known for his collegiality, was as congenial as could be, huddling with other Democrats, a broad smile on his face.

Even if all goes as expected this week and the bill clears the Senate, both sides know the game is far from over. Tom DeLay, the Republican majority whip in the House, vowed last week that he will "try anything I can" to defeat the bill, and no one doubts it is possible. Though reform bills have passed the House twice before, McCain-Feingold has changed so dramatically that it has united DeLay and top Democrats in opposition. Sources told TIME that Democratic leader Richard Gephardt complained that the increased hard-money limits directly to Daschle. He was especially angered by plans to tie the limits to the inflation rate. "If politicians make their special-interest money indexable for inflation," said a Democratic leadership aide, "they ought to index the minimum wage for working people."

If the House changes the bill, there will be a House-Senate conference to work out the differences--or provide for a suitable burial. The Republican leadership can stack the conference with reform foes, who could help kill the bill behind closed doors and save Bush from a tough veto decision. Bush will need all the political capital he has to move his budget and tax proposals through Congress; reform opponents knew last week that they could not count on his veto to save them.

Even if Bush signs on, there is still the chance that the Supreme Court will strike down part of the bill, as it did with the reforms of a generation ago. The post-Watergate effort to tidy our politics only had the effect of brushing dirt into different corners. Last week party moneymen were looking for loopholes. "Anybody who thinks you'll have less money in politics as a result is just unrealistic," says Hagel. "The money will just go outside the system." A Democratic fund raiser in California jokes that in the short run wealthy people "may save some money." But not for long. "There will be ways to get around this. You work with the issue groups more closely."

The big, glittery fund-raising dinners will not disappear. The difference is that only individuals and political-action committees will be able to contribute, not corporations and unions. A couple will still be able to give $100,000 per election cycle to national party committees. Small donors become more important, so direct-mail operations will become even more aggressive, and the "bundlers" who can enlist 100 or so donors from their company or union will have even more clout. In place of the coffee for 20 donors who give $50,000 apiece will come the banquet for 500 donors who give $2,000 apiece. The hustle never stops.

As McCain himself often says, money is like water: it finds the cracks in the wall. But the reformers argue that any change, even imperfect change, is good: it allows some oxygen into the room, and it wins some time before the influence peddlers master the new rules. In the meantime, the reformers will have shown that the system is capable of rehabilitating itself, even if it takes an entire generation to do it.

--Reported by Matthew Cooper, Viveca Novak and Michael Weisskopf/Washington

With reporting by Matthew Cooper, Viveca Novak and Michael Weisskopf/Washington