TCS Daily

Campaign Finance Deform

By Steven L. Taylor - July 30, 2004 12:00 AM

Back in the 1970s Congress had an idea, and like many ideas from the 1970s, it wasn't a particularly good one. Sure it sounded nice, but it was fraught with complications and unintended consequences. Worst of all the idea didn't really achieve the goals its set out to achieve, but despite that fact many people thought it was a swell idea that really did good things.

That idea was campaign finance reform in the form of the Federal Election Campaign Act of 1971 (FECA) as substantially amended in 1974, 1976 and 1979. The goal was to "get the money out of politics". However, it has done no such thing. In fact, the amount of money spent of federal campaigns rises every year, and because of the limitations placed on the amount of money that a given candidate can collect from an individual is relatively small, FECA guaranteed that candidates for public office will spend a remarkable amount of their time focused on money.

FECA's basic legal regime was enhanced in 2002 by the Bipartisan Campaign Reform Act of 2002 (a.k.a. "McCain-Feingold", a.k.a. BCRA). And, like most legislation whose main goal is "reform" because "reform is good" it, too, while sounding nice, wasn't a very good idea. BCRA sought (and it has already demonstrably failed to do so) to increase the ability of the federal government to "take the money out of politics" and all of the commensurate pernicious effects that such money alleged carries with it.

However, the failure of such laws should be no surprise: as long as the federal government collects and spends over 20% of the GDP, the concept of "getting the money out of politics" is farcical. Not only is governing dependent on money, so long as the Congress, with the help of the President, is going to determine how trillions of dollars are spend, then the citizenry in its various manifestations are going to care how that money is spent. And given that the best way to affect electoral outcomes is through mass media, which costs money, the very notion of taking money out of politics falls flat. Politics, by definition, involves money.

Most campaign finance reform arguments flow from flawed reasoning about causation when it comes to money and legislative action. Most people, including some extremely intelligent and well-educated people who should know better, think that the line of causality goes like this: an interest group gives money to candidate X, and, as a result, candidate X becomes persuaded to vote for whatever the interest group wants. In short, the argument goes: legislative votes are for sale. However, let us consider that contention. If the National Right to Life Council backed up a dump truck full of money to the offices of Senator Hillary Clinton, would Mrs. Clinton become a pro-life Senator? The answer is obviously, and emphatically, "no."

The line of causality is more like this: the interest group look for candidates/office-holders with whom agreement already exists, and then gives money accordingly. The ties that bind interest to politico are not dollars, but shared policy goals. The money follows the philosophy rather than purchasing it. Hence, Mrs. Clinton will no doubt receive a great deal of money from groups like the National Abortion Rights Action League, not to convince her to be pro-abortion, but because she is pro-abortion.

Understanding these lines of causation is important to understanding the entire process and whether or not "reform" is needed or will even fix the alleged problems in question.

Now, can money have pernicious effects? Sure. There are crooked politicians (but there are also crooked businessmen, preachers and professors). Further it is true that those who give money will have a far better chance at access to those in office than those who do not give money. However, since the key basis for any interest group-politician alliance is philosophical, it stands to reason that regardless of the system in place, some people will have greater access to a given Congressperson than will others. It is axiomatic, even if it is not as democratic as we would like it to be.

The specific evidence that these laws and logics are failing can be found quite readily in the current campaign for president.

The way it is supposed to work is as follows. Candidates dutifully demonstrate support in twenty states by raising at least $5,000 in each state to sum to a minimum of $100,000. Then they agree to a spending ceiling (which was roughly $37 million in 2004) and as a result they receive matching funds for each dollar received in an individual contribution up to $250. This set-up is supposed to encourage a level playing field because of the ceiling and the acquisition of smaller individual donations since they bring additional dollars automatically.

Then, to keep things nice and fair, the federal government will pony-up cash for the party's national conventions (about $15 million this year) as well as some allowances for administrative costs. The cherry on the campaign finance sundae is, of course, the grant that each candidate receives to run their general election campaign -- approximately $75 million this year.

As such, the rules produce campaign finance nirvana where money is taken out of politics and everything is nice and equalized, yes? Clearly, the answer is no, and further, it is clear to me that it doesn't matter.

For one thing, regardless of whatever strictures one tries to place on the spending by interested parties other than the candidates, ways to support your side will be found. This has been the main subplot of the entire attempt at regulating campaign finance. Despite the attempt at an even more restrictive system than we currently have, the Supreme Court struck down key elements of FECA in the Buckley v. Valeo decision in 1976 in which the Court stated:

"A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached. This is because virtually every means of communicating ideas in today's mass society requires the expenditure of money (I-A)."

Further the Colorado Republican Federal Campaign Committee, et al. v. Federal Election Commission (1996) helped further the development of the usage of so-called "soft money" -- especially by political parties.

Even the passage of BCRA and the subsequent upholding of the law in McConnell v. Federal Election Commission (2003) have not stopped the flow of cash into campaigns, as the recent rise of the "527s" has demonstrated.

The futility of these laws to curtail something that I would argue doesn't even need to be curtailed (I agree with the Court in the Buckley decision-money equates to speech in an era of mass communication, and more political speech is a good thing, not a bad one) is accentuated by the recent numbers from the 2004 campaign. As we hit the latest accounting period for the campaigns (they need to make quarterly reports to the Federal Elections Commission), the Kerry campaign, which like the Bush and Dean campaigned decided to eschew matching funds, and hence has no ceiling on expenditures prior to his official nomination, has raised an estimated $145 million to date. President Bush has raised roughly $214 million. Additionally, it is estimated that 527s and party soft money combined has reached the level of $995 million (all numbers courtesy WaPo). So, we have already hit a combined threshold of over $1 billion in monies raised to affect the outcome of the November contest. Regardless of one's position on the process, this is clear empirical evidence that campaign finance laws have no ability to take the dread presence of money from the process.

Space prevents too much comment on the fact the parties are also raising large sums of money in sponsorships for their conventions to supplement the $15 million they are getting for free. A New York Times story recently noted that the Republicans have raised over $36 million for their event, for example.

Why does all this matter? It matters for two reasons. One is that any system of pubic funding, no matter how partial or how relatively small as compared to the federal budget is simply a waste of money -- our money. If deficits and debts are to be avoided, then how can we justify paying for someone when it is empirically demonstrable that the money can be raised by private means?

The other more important point is that this system is an unmitigated joke that causes confusion and does nothing more than provide make-work for a great many lawyers seeking either to guarantee compliance or to find loopholes in the system. The rules do nothing to enhance our democracy. A wholly transparent system that allowed unlimited contributions and immediate and public (i.e., internet-based) system of disclosure would serve us far better. Such a system would foster more political speech and the ability of interested parties to know who was funding it. The current system simply creates obstacles to speech and has the ability to obfuscate in some case the sources of those funds.

No amount of rules is going to take money out of politics, and this is a fact that Congress and the "reform-minded" need to finally accept if a rational set of campaign finance rules is be instituted.

Steven L. Taylor, Ph.D. is an Associate Professor of Political Science at Troy University. He writes daily on politics at He has written on the topic of campaign finance policy in both the Encyclopedia of American Law and The Encyclopedia of Public Administration and Public Policy both edited by David Schultz. His most recent Tech Central Station column was Switzerland in the Desert?


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