Campaign Finance Floodgates?

Last Wednesday, the U.S. Supreme Court struck down a set of rules limiting the aggregate amount individual donors could contribute to candidates or political action committees. The 5-4 ruling (McCutcheon et al. vs. Federal Election Commission) has been viewed by many as opening the floodgates even further to the corrupting influence of money in the American political process (see story). While the ruling maintains limits on how much can be contributed to any single candidate or action committee, there are now effectively no limits on how many candidates or committees across the nation a wealthy donor could conceivably support.

This latest ruling comes in the wake of the major SCOTUS decision (Citizens United vs. FEC) back in January 2010 that political spending is a form of protected speech under the First Amendment and that the government cannot limit the capacity of firms or unions to spend money to support or oppose candidates in elections. Such organizations were still limited in their ability to contribute to specific candidates, but Citizens United took the gloves off where spending on independent advocacy: advertising.



Opinion on how corrosive these decisions will be is by no means universal. Some see this series of SCOTUS rulings as a kind of rescue of First Amendment rights to free speech. Others are pointing to Congress and calling for renewed, more effective action on limiting the negative aspects of money and influence peddling in American politics. Academic debate flowing from Citizens United has, among other things, proposed new reforms, such as raising contribution limits on non-corporate donors, and suggested that the Court's line of reasoning in these cases may have painted themselves into a corner, particularly where prospect for foreign contributions is concerned (see link).

Yet, what's striking to me about all of this is how frequently this issue of money in American politics is being revisited. I am torn on this issue. On the one hand, the libertarian in me buys the reasoning that limiting the expenditure of money amounts to a limitation of the exercise of speech. If America were a different society where money and the capacity to get your message heard were not so intimately linked, I might feel differently. That's not the case. On the other hand, the idea that those with deep pockets (the Koch Brothers are a popular target of liberals) can capture the political system or influence outcomes is anathema to most Americans.

Moreover, there is a certain futility to all of this that troubles me as well. When we look at the regulation of Wall Street finance or drug testing of Olympic athletes, it seems that the incentives for cheats and scumbags to game any system that is put in place are exceedingly high. In reality, you don't even have to be a cheat or scumbag. On Wall Street, for example, the limitations imposed by a regulatory regime are merely the institutional structure within and around which bankers compete with each other to make money. Regulations are inherently retrospective, regulating for the last crisis. Profitable innovation in finance is almost always going to be in front of the regulation. In athletics, the cases of Lance Armstrong or Ben Johnson get lots of attention, but allow us to avoid the larger problem of how powerful the incentives for performance enhancement really are.

Why not lift the rules on everyone, "level the playing field" in some way? One might argue that the rules only limit people who genuinely (naively?) follow them. I take some solace in all of this talk of money in American politics from the fact that the American political system is very difficult to influence. James Madison did a nice job with all those checks and balances gumming things up. For those who wonder why America is such an ungovernable beast, you will find some nice insights in the Federalist 10 and 51. Yet, while Madison may have done his bit to protect everyone from the influence of faction, the flip side is that it takes a lot of money to organize yourself to have any influence at all on the U.S. political system. Does anyone remember "527 Groups" like Swift Boat Veterans for Truth which savaged John Kerry in 2004? Or what about the Colbert SuperPac from 2012? Some of these groups become more influential than others, but the message is at least as important as the money being used to deliver it. While there are many such organizations, and a lot of money is being spent, many confront countervailing organizations and/or would be hard pressed to point to tangible outcomes (see Center for Responsive Politics). There is also a distinguished list of well-financed candidates who have tried, and failed to win office by spending lots of money; Meg Whitman, Carly Fiorina, John Corzine, and Mitt Romney, among others.

Moreover, money, while very important, isn't the only obstacle to winning elections in America. A range of barriers constructed by a stew factors (state legislatures and party politics) have constructed congressional districts that are virtually a sure thing for incumbents; so much so that only a small hand-full of congressional districts are genuinely competitive in any given cycle. Coupled with America's "perpetual campaign" in which there is virtually no beginning or end to an election cycle, and things get very expensive.

At bottom, I'd still like to think that ideas carry the day. Does America spend too much money on it's politics? Absolutely. But is it as corrupting as some fear? I am not so sure. There are those who think the McCutcheon ruling gives Republicans a much needed boost going into 2014 midterms. However, President Obama's 2008 brilliant campaign for the White House suggests that money still needs to be coupled with the right organization and message to win the day. Money alone still faces an uphill climb. That's a message Republicans would do well to heed as 2014 midterms approach.