Hoover Daily Report

Campaign Finance Reform: What Next?

Monday, March 10, 2003

As he shepherded the McCain-Feingold legislation to passage, John McCain made it clear that he expected additional legislation to become necessary once politicians and interest groups learned to evade the new limits. Recent Federal Election Commission decisions and the activities of interest groups have proven him right, although he probably is not too happy about it.

One alternative for new reform would be to restrict contributions or spending. Even if this is constitutional (it usually is not), it is unwise. Studies show that the information available to voters and voter turnout increase with the amount of money spent on campaigns. In addition, taking money out of campaigns does little to affect the larger sums spent on lobbying, an activity removed from ordinary citizens. If anything, well-funded campaigns provide a counterbalance to special interest lobbying, in that such campaigns are more likely to publicize and punish egregious service to interest groups.

Another approach is to finance campaigns publicly. This has been a nonstarter because voters dislike spending tax dollars on politicians, something that is not surprising in light of the current formula-based system's record for presidential candidates. That formula did little to wean Gore or Bush from wealthy donors even as it wasted 16 million taxpayer dollars on the Buchanan campaign (Buchanan spent an astounding $89 per vote compared to $3.66 for Bush and $2.35 for Gore). The formulaic approach may even have distorted the election: Buchanan ran for president because he had public funding, and Nader ran because he wanted public funding. Their presence on the ballot in Florida, as we know too well, may have changed the election outcome in Florida and the nation.

Done properly, however, public financing could reduce political reliance on special interests and the wealthy without provoking voter ire. First, citizens should be empowered to decide which candidates deserve money. As Bruce Ackerman from Yale Law School suggests, each voter could be assigned a fixed dollar credit that he or she could direct to any candidate (or cause). This would dampen concern about money being spent on disliked candidates and create a means whereby candidates could run credible campaigns without constantly currying favor with corporate, union, and wealthy interests.

Second, reclaiming the tax dollars already being spent on campaigns could provide a good start toward a serious program of public financing. Two hundred million dollars were spent on presidential candidates' campaigns in 2000, with almost $30 million on party conventions. In addition, Congress spends $1.6 billion every year on staff, with the modest estimate that congressional staffers spend 10 percent of their time on reelection activities. Reclaiming these public campaign expenditures could provide $450 million per two-year election cycle.

The bottom line is that a significant amount of federal money goes to campaign activities. The first order of future reform should be to ensure that such funds increase the voice of ordinary citizens, rather than protect incumbents.