Time for a new campaign finance reform agenda


While pundits continue to sort out the real meaning of last week’s elections, some facts seem crystal clear: we held elections, tens of millions of citizens voted for (or against) candidates as they saw fit, and, in almost all cases (barring death, resignation, etc.), the candidates they chose will spend at least a couple of years in public service until the next election.

This obvious statement seems necessary given all of the hysteria and hyperbole in the wake of the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission, which said that corporations, unions, advocacy groups, and other associations have a First Amendment right to speak on behalf of their members, shareholders, and donors.

Combined with another important case called SpeechNow.org v. Federal Election Commission, which struck down limits on what citizens can give to independent groups that want to speak about politics, the self-styled campaign finance reform community predicted “death for democracy” and similarly alarmist pronouncements of doom for our political system.

Instead, voters were exposed to vast quantities of political speech from a wide variety of perspectives and interests, speech with which they could agree or disagree—and speech they could affirm or discard.

Despite the fact that America’s political system survived and thrived in 2010, predictable calls to return to the old way of regulating political speech persist. Advocates for the antiquated system of speech regulation rely on a worldview where only politicians, the media, and a few favored interests should have a meaningful say in politics and campaigns.

They are pushing for taxpayer dollars to be directly handed to politicians running for office as well as a constitutional amendment to rip freedom of speech out of the Bill of Rights, at least as it relates to political speech, and restore the old order by placing government bureaucrats back in charge of who is allowed to speak in politics, how often, to whom, in what manner, and what can be said.

Fortunately, there is little chance the First Amendment skeptics will succeed. The new Republican majority in the U.S. House seems to have little interest in reversing Citizens United or dishing out public money to politicians, nor does a strengthened Republican minority in the Senate. That’s not to say Republicans have any sort of ideological purity on this issue—McCain-Feingold passed in a Republican House and was signed by a Republican President—but it seems clear that the incoming Republican House majority will reject any onerous campaign finance laws.

The public also shows little interest—most voters seem to have ignored the fabricated claims of foreign money flooding U.S. elections, and likewise didn’t pay much attention to all the spurrious charges being leveled about groups violating their tax status or failing to disclose their membership and donors.

So the old “reform” agenda seems dead, undone by a First Amendment-friendly Supreme Court, opposition party success in the November elections, and a public that is largely indifferent to stricter regulations.

But there is still an opportunity to address campaign finance issues, including dealing with issues created by Citizens United or left over from previous “reform” legislation. Today, the Center for Competitive Politics released “After 2010: A Modern Agenda for Campaign Finance Reform,” which outlines steps policymakers can take to increase incentives for citizen participation in politics, encourage electoral competition and simplify the maze of campaign finance regulations.

Many of these issues could have broad appeal on both sides of the aisle, and in some cases even generate some support from the professional reform lobby. Here’s a summary of a few of the issues that Congress should consider:

  • Eliminate caps on expenditures coordinated between parties and candidates. Right now parties are severely limited in the amount of money they can spend on ads coordinated with their own candidates. This forces political parties to guess what issues and points their candidates would like communicated to their voters, and can often lead to candidates actually being hurt more than helped by their own parties. It seems silly to limit what parties can talk about with their own candidates, and that these limits serve some sort of anti-corruption purpose.
  • Raise campaign contribution limits. There is little dispute that Citizens United and SpeechNow.org have both put candidates and political parties at a significant disadvantage to independent groups in terms of not just financial resources that can be raised, but the amount of time required to raise them. Simply put, independent groups face no limits and can literally raise millions of dollars with just a few phone calls, while candidates and parties must invest substantial amounts of time and resources in order to raise funds in dramatically lower increments. Simply increasing contribution limits to reflect inflation since 1974, when limits were first imposed, would have meant in 2010 that individuals would be able to contribute about $4,400 to candidates and $177,000 to political parties, and PAC limits to candidates would be roughly $22,000.
  • Increase disclosure thresholds. Disclosure of contributions to candidates, political parties, and PACs can serve genuine interests in combating corruption, although not without cost in terms of citizen privacy and a tendency to inspire demagoguery instead of substantive debate. To the extent that disclosure can provide helpful information to voters about candidates, it can actually get lost in an avalanche of disclosed smaller contributions that few would think constitute a threat of corruption. Raising the disclosure threshold, perhaps to one-half of the contribution limit, would still allow voters to see where the bulk of a candidate’s funding is coming from without burying that information in reports that are hundreds or even thousands of pages long.

These relatively modest reforms would correct one of the most significant problems created by Citizens United, which put candidates and political parties at a dramatic disadvantage to business corporations, unions, advocacy groups, and other independent speakers. Not only would these reforms reduce this disadvantage, they are likely to reduce the amount of money flowing into 527 and 501(c) organizations which today exist to some extent because individuals can’t give more to parties and candidates.

Other worthwhile ideas to consider might include restoring the federal tax credit for small contributions to political candidates, allowing direct corporate and union contributions to candidates under the same limits that individuals face, and revising the current ban on foreign nationals contributing to U.S. elections by codifying the more stringent FEC regulations on the subject.

Most of these are unlikely to please the most obsessive First Amendment skeptics, who remain focused on limiting the quantity and variety of political speech and speakers. But several prominent “reformers” have already expressed interest in ideas like eliminating the cap on coordinated expenditures and tax credits for small contributions, and there is reason to believe that a bipartisan consensus could be built around these reforms.

It is time to abandon the old paradigm of campaign finance regulation, which was built on the notion that the desire of citizens to contribute to candidates and causes could be tightly limited and controlled, independent voices could be stifled, and that a reduction in corruption and an increase in the public’s faith in government would result.

Instead, Congress should take this opportunity to begin the modernization of campaign finance regulation by increasing or removing limits that put candidates and parties at a significant disadvantage to business corporations, unions, advocacy groups, and others while also improving disclosure requirements by reducing the sheer volume of information that is required to be revealed.

The Center for Competitive Politics is now the Institute for Free Speech.