The Folly of Campaign Finance Reform, Part III - Why Incumbents and Millionaires Love Them

Even if you disagree with both my posts on Campaign Finance Reform (CFR) so far, there are three incontrovertible truths about what has happened since the Supreme Court upheld part of Buckley v. Valeo in 1976. First, since 1976 there has been a huge jump in the number of incumbents that have been reelected. Second, there is a growing number of millionaires being elected to public office. And third, so-called “public financing” of elections to purge the system is not a viable option and – in the case where it has existed since 1976 – is dying on the vine. These are additional reasons why CFR laws have been a complete failure, made politicians more dependent on money than ever and have made the political system and money more interdependent than ever.

Let’s talk about incumbency first. Incumbency has always been a difficult mountain for political challengers at any level to overcome. Unless an incumbent is truly unpopular or besieged by scandal, challengers everywhere have an uphill battle for name recognition, let alone victory. That is why so much attention is devoted to “open seats,” where there is no incumbent running. Since CFR laws were passed, this difficult task has been made close to impossible because these laws discriminate against challengers by making it almost impossible for them to raise enough money to effectively challenge sitting congressmen and senators. Is this why CFR laws always pass by wide margins?

Below are the results for Congressional incumbents pre- and post-Buckley up to 2000. If you want to view the 2000-2008 results visit the House Clerk's page but I promise the results are the same.

House Races 1920-1974

Incumbents Challengers
Winners 9,733 1,005
Winning Percentage 90.6% 9.4%

House Races 1976-2000

Incumbents Challengers
Winners 4,826 218
Winning Percentage 95.7% 4.3%

Senate Races 1920-1974

Incumbents Challengers
Winners 454 161
Winning Percentage 73.8% 26.2%

Senate Races 1976-2000

Incumbents Challengers
Winners 230 45
Winning Percentage 83.6% 16.4%

Source: Rodney Smith, Money, Power & Politics, LSU Press, 2006, p.9.

The most important thing a challenger must do in any election is build up name recognition, and the way to do that is through political communication – direct mail, advertising, lawn signs, bumper stickers and other established methods. If a challenger cannot effectively communicate because his or her fundraising is being handicapped by CFR laws, those laws are not only breaking the First Amendment but also interfering in election outcomes. This is not the only reason so many incumbents are re-elected, but it is the primary reason why challengers have become less successful overall since these laws first took effect.

While incumbents must adhere to the same contribution limits, they are not prevented from raising money while in office, and this has led to a perpetual fundraising quest so incumbents can also overcome contribution limits while simultaneously building up war chests to discourage competitors. Virtually every elected official in Congress develops a PAC, and naturally seeks out individuals and other PACs who can donate large amounts of money. Massachusetts has a $500 limit on contributions, and while state races are less expensive the lower amount causes local politicians to spend even more time fundraising to compensate. And when there's a war chest to build up to both run campaigns and deter challengers, a politician is practically forced to spend time soliciting those individuals or PACs that can give him or her the maximum amount.

But there is one glaring loophole to CFR laws – spending one’s own money to win elections. While being the richest candidate does not always guarantee success (just ask John Corzine in NJ, or Jack E. Robinson here in Massachusetts), being able to tap one’s own wealth makes CFR laws moot. The richest candidate may not always win, but the candidate who spends the most money generally does and both parties are increasingly turning to millionaires as viable candidates – candidates who are rarely representative of the districts and states they represent. Congress has become an exclusive club, far different than the citizen legislature it once was.

In 2004, Agence France Presse reported that 123 members of the 435-member House of Representatives earned at least $1 million in the prior year, and one in three U.S. Senators were also millionaires. Senators are not getting this rich from their salaries, which is $154,700 for newcomers. Financial wealth is a bipartisan issue, with Republicans and Democrats alike reporting huge financial assets; the wealth of Mass Democrats John Kerry and the late Ted Kennedy are well-known. There is little doubt that CFR has made it infinitely easier for wealthier upper classes to run for public office because they can skirt campaign finance reform laws, while middle class office-seekers and other average Americans must contend with the existing system that places limits on how much cash is available for them. It is an uphill battle few of them can win.

One frequently cited solution to CFR is the public financing of elections. Common Cause says this is a way to, “give voters more control over government, make politicians accountable to constituents rather than campaign contributors, save taxpayers money and level the playing field by giving all citizens a fair shot at getting elected.” Unfortunately the most prominent public financing of all – the Presidential Campaign Fund – is atrophying from a lack of interest from the public and a growing number of candidates opting out of the system. The Fund is founded by taxpayers who voluntarily mark off a $3 donation on their federal tax returns. The law then gives candidates a fixed amount that is indexed for inflation to spend before the primaries, and a larger amount for the two nominees to spend between the conventions and Election Day. In return, the candidates must adhere to a spending limit and not spend more than $50,000 of their own money.

Both party candidates used the system until 2000, despite the fact that the largest percentage of taxpayers to ever check the “Yes” box was 28.7% in 1980; by 1994 only 13% checked the box and in 2007 only 9% said yes. The steady decline indicates the lack of public support for the system. In 2000, George W. Bush became the first candidate to decline public funding, believing that in a campaign season that had grown longer and more costly he would not have enough money to win the election if he had to abide by spending limits. Bush was also able to raise far more funds than he would have received from the Fund. In 2004, Bush, Kerry and Howard Dean all declined money from the Fund for the same reason, and their fundraising success was a watershed moment for presidential candidates. In 2008 Democrats Clinton, Obama, Edwards and Richardson opted out, as did Republicans McCain, Giuliani, Romney, Paul and Huckabee for the same reasons the 2004 candidates did. The success many of these candidates had raising money from the private sector (or in Romney’s case, tapping his own fortune) proves that the Fund has become antiquated, if not irrelevant.

I'll wrap this up in the next post.