Politicians’ Self-Interest and the Future of Campaign Finance Reform
The debate surrounding campaign finance reform has too long revolved around esoteric questions such as whether money is speech, or whether corporations are persons under the First Amendment. Those questions are fine for the Supreme Court, but for the practical purpose of enacting meaningful campaign finance reform (which the Court then, of course, can review), they have little relevance. One framework for understanding campaign finance that is too often overlooked starts with the mundane fact that politicians pursue their self-interest. Candidates will always find loopholes in the law unless their fundraising incentives are fundamentally changed, unless they see compliance as being in their political interest. If that is true, the future of campaign finance reform – if there is to be one – will depend on legislators’ ability to craft a system that candidates like. It seems counterintuitive, but effective campaign finance reform might just depend on satisfying politicians.
Life, Liberty, and the Pursuit of Self-Interest
In an ideal world, politicians would stay in power by enacting legislation that makes society better off and thus endears politicians to their constituents. However, as Alex Keyssar of the Harvard Kennedy School explained, there is something fundamentally different about campaign finance. “An inherent problem we’ve seen with reform,” Keyssar said, “is that the people making decisions are the people who won elections under the old system.” They have a perverse set of incentives to maintain the system under which they know they can win.
Even when a piece of reform legislation is passed, like McCain-Feingold in 2002, mile-wide loopholes can destroy its effectiveness. 527s and other so-called “independent” organizations falling outside the regulatory scope of the Federal Election Commission have raised enormous amounts of money to support or oppose candidates and causes. Keyssar believes that this means more restrictions are needed. “What the last 20 years of law have told us is that if you don’t limit expenditures, [politicians] will simply find a way around fundraising limitations.” But spending limits will be a tough sell to politicians whose success is owed, in no small part, to their ability to spend at least as much as, if not more than, their opponents. Of course, there are policymakers who strongly believe that spending limits are tantamount to speech restrictions, but most politicians are more pragmatic than ideological, and, perhaps, care more about getting re-elected than anything else.
Regulatory Side Effects
One reaction to this situation is to believe that campaign finance reform has counterproductively opened the door for politicians to distort the electoral system by drafting legislation designed to keep money out of their opponents’ hands. Bradley A. Smith, the former Republican chairman of the FEC, told the HPR that the history of campaign finance reform has been marked by both Parties’ efforts to gain a financial edge. “If you know how the other side spends money,” Smith explained, “you can pass laws to hurt them and leave you untouched.” Many Democrats, for instance, remained silent as Barack Obama tapped the enormous potential of the Internet in the 2008 election to raise unprecedented amounts of money. But, according to Smith, Democrats had strongly opposed direct-mail solicitations because Republicans historically excelled at that way of raising money. Thus, while the Internet may change how candidates raise money, one can understandably believe, as Smith does, that “it will simply lead to a change in strategies to limit the opposition’s access to funds.”
Anti-reform activists further argue that these self-serving motives make regulated elections inherently unfair. John Samples, director of the Center for Representative Government at the Cato Institute, told the HPR that one of the most detrimental side effects of the reform movement has been to make it even more difficult for congressional challengers to unseat incumbents. While there are many factors that combine to give incumbents a significant advantage, Samples argued that challengers especially need money to get the necessary publicity to defeat a sitting representative, and “if you make [fundraising] a little harder, then in marginal cases you will keep people from coming into the system.”
Channeling Self-Interest
But while politicians’ self-interest has been a major hindrance to campaign finance reform thus far, some reformers believe that, if channeled appropriately, self-interest could actually advance reform efforts. Nick Nyhart, the president and CEO of Public Campaign, a nonprofit advocacy organization, told the HPR that one factor driving some politicians to use public financing is precisely “the pressure they feel to fundraise.” The Fair Elections Now Act, which has been introduced in both the House and the Senate, relies on politicians’ desire for a truce in the fundraising war, and, according to Nyhart, its passage would give federal candidates strong incentives to tap into a public financing program. Under the proposed law, candidates would only be eligible for public funds if they sought donations from their constituents of $100 or less. Once they reached a certain threshold of private donations, candidates who opted into the system would then receive a fixed amount of public funding, plus an additional four dollars for each dollar they raised through small contributions.
Other new campaign finance proposals are similarly designed to appeal to politicians’ self-interest. In 2000, for instance, Maine and Arizona adopted a Clean Elections program, a public financing system that is beginning to catch on in other states as well. Under the Clean Elections plan, a candidate who runs with public money is guaranteed additional matching funds if he or she faces a privately funded opponent. So far these incentives appear to have been effective: in Maine statewide elections, for instance, the vast majority of candidates choose to finance their campaigns with public money. Nyhart is hopeful that the same effects can be duplicated at the national level. “Ultimately,” he said, “we want a system where candidates would rather take public financing than run with private funds.”
In the end, the responsibility for improving campaign finance laws falls on legislators, not the courts. Whether money is speech and whether corporations get the full protection of the First Amendment are difficult and interesting questions, but they are not as relevant to the implementation of practical campaign finance reform as we tend to think. Regardless of the restrictions that Congress imposes on fundraising, if there is no incentive for candidates to abide by them, politicians will continue to find new loopholes to exploit. Future campaign finance reforms, if they are to be significant and effective, will have to grapple with politicians’ baser motives in order to make sure that, paradoxically, the political process itself is uncorrupted.