McCutcheon vs. FEC- Part 5: The Problem With Contribution Limits

Before using some illustrative problems with campaign contribution limits- the issue in this case- we need to get beyond a certain liberal Utopian myth. Democrats and liberals are often loose with their tongues in many areas in their criticisms of conservatives when they claim the GOP or the Tea Party wants to return us to a bygone era. With respect to campaign finance, Democrats and liberals seem to be under the mistaken impression that campaigning today is done on horseback as a candidate runs from town to town giving a speech in the town square while the townsfolk look on, and hoot and holler. Those days are gone. We live in a political campaign world of the mass media and the Internet. In fact, the major mode of information from that Utopian non-moneyed campaign era liberals aspire to- the newspaper- is rarely even read these days.

A second general observation is the complaints we heard in the wake of Citizens United– that money is not speech. It may not be a spoken or written word in the vernacular sense, but campaign contributions and expenditures certainly convey a physical and a visceral message. Because most campaigning is mass media-driven, those outlets require money- more in some markets than in others. No less a liberal Justice than Breyer in the Sorrell decision regarding Vermont’s excessively low campaign limits illustrated the inflation in getting out political messages in a few short years. That led to his comment that unusually low campaign contribution limits, no matter how noble the intentions, start to enter the “danger zone” in restricting constitutionally political speech.

In the visceral sense, campaign contributions ARE also speech in that they convey a message of affiliation with the candidate, their views, or their political party. If I donate to my local congressman, I am conveying the message that I agree with him, that I support their campaign, that I disagree with their opponent. Contributions most definitely convey a positive message and withholding a contribution conveys a negative message. Symbolically, it is no different than putting up a lawn sign for that representative.

Now, to illustrate how campaign limits are sometimes detrimental, lets look at the following example. But, let me state up front that I fully understand the reasoning for these limits: Liberals and Democratic Party support for campaign finance limits is a sorry attempt at being proactive with respect to possible corruption, the appearance of corruption, or undue influence. However, other than the appearance of corruption argument, there are laws like the Hatch Act and bribery laws that deal with it. Regarding undue influence, there are ethical regulations and standards and laws regarding lobbying and lobbyists that, admittedly, are not always enforced. Regarding the appearance of corruption, on the other hand, all these campaign finance laws are is “feel good legislation.” By attempting to remove the appearance of corruption, the lawmakers appear proactive. To illustrate, 20 Democratic Senators and three Republican Senators who voted for McCain-Feingold still remain in Congress. In the post-BCRA/post Citizens United era, eleven of those Democrats and one Republican has faced reelection. Collectively, those twelve Senators out-raised their opponents $181 million to $80 million. Clearly, these “feel good” Senators are not averse to accepting and using campaign contributions.

To get to the example, everyone is well-aware that income is not evenly distributed among the 50 states. We know this from demographic information gleaned from Census data- things like percentage of the population living in poverty, number of people on public assistance, median household income levels and the like. We do not force the affluent to move to the lower level states in order to “even things out.” Now, take the example of Mississippi and Connecticut, two states roughly equal in population. Obviously, Connecticut is more affluent than Mississippi and likely to have more high earners than Mississippi. That is not say that there are no poor people in Connecticut or no rich people in Mississippi. We also know for a fact that Connecticut is a fairly reliable blue, liberal state and Mississippi is a fairly reliable red, conservative state. For the sake of simplicity, lets say each state has 1,000 residents, yet 40%, or 400 people in Connecticut are affluent and regularly reach a campaign limit of $100,000. However, 75% of those 400 people (or 300 people) are liberal Democrats who give only to Democrats. That is $30 million for the liberal/Democrats and $10 million for the conservative/Republicans. Hence, the ratio is 3:1 in favor of the Democrat each and every time out. Assuming that he who raises and spends the most (a false assumption I might add and one liberals rely on) wins the election, someone needs to explain how campaign contribution limits help even the playing field. If anything, they encourage the political status quo in Connecticut in this example.

In Mississippi, they have maybe only 200 residents who are affluent enough to contribute the statutory $100,000 limit and 80% of them are die-hard conservative Republicans. That is 160 people for a total of $16 million. Meanwhile for the more liberal, Democratic affluent residents of Mississippi who number all of 40, that comes out to only a maximum aggregate contribution amount of $4 million. Here, the ratio is 4:1 in favor of the conservative Republican and again, how campaign contribution limits “even the playing field” and encourage challengers requires some explaining from liberals. The solutions in both cases is to hope for outside expenditures, but liberals frown on that. There are always political action committees, but even they are limited, as well as the state and national parties. Of course, there is always the small amount donors which works fine if a state has a sizable proportion of the population that can make small donations. But even still, the challenger would need a ton of small donors to overcome those original ratios. For example, even if the remaining 800 people made a $10,000 donation (not a small donor in my book), Democrats would still lag behind the Republican by $4 million ($16 million to $12 million) in this example. From a practical standpoint, the liberal mantra of limits works only in a hypothetical world of even wealth distribution among the 50 states. That is not even taking into account the differential in advertising rates in any particular state, the size of the state and amount of travel and logistics required, etc.

Another important point is the actual influence of money. Obviously, the bigger the race, the greater amount of money. Hence, presidential campaigns are more expensive than Senate campaigns which are more expensive than House campaigns. In 2012, over $1.1 billion was raised on all races in the United States with over $600 million raised by Republicans. That is excluding the presidential race, but when that figure is added in- $1.3 billion- the total raised is a staggering $2.4 billion. Most importantly, what did all this money buy. Opensecrets.org rates “hot” races that have large fundraising totals. Of the 37 hot races, the candidate who spent/raised more won 19 of these races for a winning percentage of just over 50%.

Regarding those outside groups, just looking at House races where at least $3 million was spent in total by these groups, the candidate who received the most outside help won only 18 of 47 such races. That translates into a 38% success rate for outside groups. Now, there is one thing that critics of outside group spending may be right about. More than 67% of the outside group spending is of a negative nature; that is, attack ads rather than advocacy for a candidate is more common. Thus, even though the political discourse has become more coarse and of an attack mode nature, it would appear that these tactics are falling on deaf ears two-thirds of the time.

Looking at another parameter of this debate, we can look at congressional earmarks, who they go to, and if who they went to contributed to the campaigns of the sponsors of those earmarks. In FY 2010- the last year for reliable statistics- there is some evidence to suggest that the higher the contribution, the greater the earmarks. For example, four Senators received over $100,000 in contributions from contributors who benefited from an earmark. Those earmarks averaged $61.3 million per Senator. Conversely, of 18 Senators who received less than $10,000 in contributions, their earmarks averaged $8.6 million. The same trend is seen in the House. Only two members received contributions exceeding $100,000 in aggregate and the earmarks to those contributors averaged $24.2 million per Representative. Of the many House members who received less than $5,000, their earmarks averaged just $5.8 million per member. Just one caveat about earmarks: the majority of all earmarks go to the defense industry and one would be hard pressed to find too many Congressional districts- let alone states- without a defense contractor or supplier. Incidentally, Democrats in both chambers are the primary culprits when it comes to earmarks. Regardless, these issues are better addressed through stronger lobbying laws and consistent enforcement, not campaign finance reform.

As noted earlier, expenditures are generally granted greater constitutional protection than contributions. It is here that liberals most complain since Citizens United opened up greater spending and advocacy by “outside groups.” The main problem is that they have not caught up to conservative groups in fundraising with conservative-leaning groups outspending liberal groups rather consistently in the two most recent cycles. Clearly, Citizens United opened the floodgates of money. Before 2010, outside groups spent $412.8 million, but after that decision the dollar figure jumped to $1.234 billion, an almost 200% increase. In 2008, the money spent was almost evenly spent between liberal and conservative groups with a 52% advantage to the liberal groups. In 2012, only 31% was spent by liberal groups. Despite the greater raw dollar amounts and the greater proportion of those dollars going to conservative causes, however, Republicans failed to win the Senate (in fact, they lost ground), failed to win the White House, and lost a net total of two seats in the House in 2012. The Republican wave in 2010 in the House was not attributable to Citizens United (it was too new to have a big effect) and is more correctly attributable to a backlash against Obamacare and the stimulus.

This belies a common liberal fallacy that the more money spent, the greater the chance of victory. At the end of the day, dollar bills are not pulling levers in an election booth. Liberals are under the impression that every voter is swayed by the daily inundation of political advertisements. Admittedly, a certain proportion of the electorate may be swayed, but not enough to make a major difference as all these statistics prove.

In conclusion, campaign finance reform efforts in the past have generally been failures and “feel good” legislation. Most importantly for any concerned American citizen, they infringe on one’s First Amendment rights in the most important area- that of political discourse and advocacy. Of course, folks like the Koch brothers and SEIU want to help elect candidates sympathetic to their interests. Other than the scale of the contribution, however, how is that qualitatively different than me donating $100 to a candidate who is sympathetic to my interests? The liberal “problem” with Citizens United is that liberals groups- primarily unions- had an advantage prior to 2010 and the playing field has now been evened out a bit. If George Soros or the Koch brothers want to spend $1 billion on a losing cause, then they should be allowed to do so because in the end, it is basically a 50/50 crap shoot. Do we risk the exercise of a valued constitutional right to create some fake Utopia rooted in the early 1900s?