Now We Are Way Too Excited About Campaign Finance Skepticism

May 13, 2013Mark Schmitt

Some people overhyped the influence of money in the last election, but we shouldn't downplay the need for smart, effective reform.

“We got way too excited over money in the 2012 elections,” my former colleague Ezra Klein said at a conference on inequality and politics at Yale last week, in remarks that he published as a column. A simple political science model for predicting the presidential election, which didn’t account for spending, nonetheless hit the results exactly; Citizens United didn’t unleash a torrent of corporate spending; and even in Senate races, big spending by Republican Super-PACs didn’t make much of a difference.

The first question to ask is, “What do you mean ‘we’?” More than a few of us argued that Citizens United wouldn’t be a world-changer – if major corporations had wanted to take major risks in the electoral arena, there were already ways for them to do it. (It actually had more impact than I thought it would.) And it has long been the consensus in political science that once a candidate or campaign has reached a sufficient threshold to be heard and to be competitive, extra spending beyond that has diminishing returns, whether that spending is within the campaign or from outside groups. That is, you can be outspent 3:1 and win, as long as your 1 is enough to compete in that state. Many wealthy, self-financed candidates have learned that lesson the hard way. All presidential candidates and almost all major party Senate candidates have reached the threshold where additional spending for or against them matters very little. Many Super-PACs, predictably, did more for the political consultants who were collecting fees from them (typically 15 percent for broadcast ad buys) than for the candidates they were intended to support.

There were ill-informed journalists, pundits, and advocates last year who made all sorts of claims about the impact money would have on the elections, but just because their predictions were predictably wrong doesn’t mean that “we got overexcited” or that we should stop being concerned about the influence of economic inequality on the political process. Money matters as a gatekeeper, for example: Many candidates, especially at the congressional or state legislative level, don’t have it and don’t know how to get it. It matters as a framer of the issues that are acceptable for debate – it’s not only money that gave the National Rifle Association the clout to block an amendment with massive majority support, but money helped. Money unquestionably shaped the Dodd-Frank financial reform legislation and might ultimately render it almost unenforceable. The life of a member of Congress without a very safe seat revolves almost entirely around money, as an article in the Boston Globe over the weekend showed. Newly elected Democrats were advised last fall to set aside four hours each day for “call time” to donors, more than they spend on any other activity and more than twice the time they spend with other constituents.

If money doesn’t have such a direct impact on election outcomes, then why does it have these other impacts? Are members of Congress overexcited, too? Perhaps, but most often the reason that we don’t see the impact of money so directly in the endgame of presidential and Senate elections is that the candidates have already done whatever they need to do to reach the threshold of competitiveness. They’ve done the three fundraisers a week, the hundred phone calls a day; they’ve avoided the tough votes that would alienate supporters. If they hadn’t done those things, they wouldn’t be there, in what are, in effect, the finals.

That’s why the key principle of reform is not to limit spending in the endgame, but to make it easier for candidates of all kinds to reach the threshold where they can compete, without spending all their time with major donors and without all the compromises that necessarily ensue. Trevor Potter and Bob Bauer, election lawyers for John McCain and Barack Obama, respectively, recently proposed what they called “A New Recipe for Election Reform,” which would “focus not on further restriction funding for political activity but rather on broadening avenues of citizen participation,” drawing on the experiences of states and localities with systems that encourage small donors. This is something I’ve been pushing for many years, and it has been gratifying to see a consensus build around the idea, especially as the state and local programs, such as New York City’s matching funds for small donations, have proven effective, stable, and constitutionally sound.

But back to Ezra Klein – he’s skeptical of these approaches as well. Later in the week, he went on to argue that the Potter-Bauer approach of encouraging participation would backfire, because small donors are more likely to be driven by ideology and/or partisanship (two different things that are often conflated), and are at least as bad, and maybe worse, than big donors or corporate money. “Just as big money is corrupting, small money is polarizing. And it’s polarization that probably poses the bigger threat to American politics right now.” Ezra is right that some of the federal candidates who collected the most money from grassroots donations were the most ideologically extreme, such as defeated Rep. Allen West of Florida. But that’s looking at the extremes, not the middle tier of politics, where candidates struggle to find the base of donations to be heard. And there’s no evidence that small donor systems such as New York City’s, Connecticut’s, or Minnesota’s superb system of automatic, quick tax rebates for small contributions have made those jurisdictions more polarized. (Minnesota’s system has been unfunded since 2010.)

This skepticism also reflects a quaint view of the role of big money and corporate money in politics. There was a time when corporations, through their PACs, tended to split their donations roughly 60-40 between parties, hedging their bets and mostly protecting useful incumbents. Or an industry might have Republican firms and Democratic firms. But in a polarized time (and partisan polarization reflects forces much bigger and more intractable than either money in politics or congressional procedures), corporations and major interests have moved more sharply to one side or the other. Most of the Wall Street firms, for example, moved toward the GOP, and the U.S. Chamber of Commerce, historically as cautiously solicitous of whichever party held power as possible, moved almost completely Republican. Secret vehicles, such as the Chamber’s 501(c)4 committee, allowed corporations such as Aetna to maintain the veneer of bipartisanship, while simultaneously putting millions of dollars behind one party. The most notorious Super-PACs of 2012, such as those that kept alive the candidacies of Newt Gingrich or Rick Santorum, or that targeted Senate Democrats, were at least as fiercely partisan as West’s donors.

There is a challenge for reform: Can we encourage genuinely average voters, those who don’t watch Glenn Beck or Rachel Maddow, or read RedState.com or Daily Kos, but who have preferences and views of their own, to put a few dollars behind congenial candidates? And can we boost those contributions with public financing that doesn’t have any “ask” attached to it? As we pursue the task that Potter and Bauer set out, to absorb the lessons of successful systems, this is one of the questions that we should be asking. Small donor financing won’t end partisanship or polarization by itself. But it can be a big part of a system that allows legislators to move more independently, develop new coalitions, and spend more time listening to constituents than lobbyists and donors.

The role of money in politics has sometimes been overstated, but that doesn’t justify the fashionable cynicism about money and reform that seems to be infecting the wonk class. 

Mark Schmitt is a Senior Fellow at the Roosevelt Institute.

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