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Cap and Unleash

It’s time for a grand bargain on campaign finance reform

By Dylan R. Matthews

As the Republican presidential primary heats up and candidates start scrounging for cash, one of the first choices facing them will be whether to accept public financing. On the one hand, the program is a good deal, especially for dark horse candidates without big networks of donors. If a candidate raises $100,000 in small donations from at least 20 states, the government will match up to $250 of every further donation to that candidate for the primary’s duration.

But the deal comes with strings attached. Candidates have to obey national and state-level spending limits for the primary’s duration, and also cannot spend more than a small amount from their personal funds, which for wealthy candidates like Mitt Romney will be a deal breaker, as it was for him in 2008.

Perhaps more crucially for Republican candidates, however, is that party’s ever-selective deficit hawks have set their sights on public funding as a source of budget cuts. This past January, the Republican House voted to abolish the public finance system for presidential elections, despite the fact that this would only save about $52 million a year, a rounding error in the context of the overall federal budget. What’s more, all of that money is contributed voluntarily, through a checkbox on the personal income tax allowing filers to donate $3 to fund elections.

That said, Republicans are far from the only guilty party. President Obama set a bad precedent in 2008 when he became the first candidate ever to reject public funding for the general election. He then proceeded to spend nearly three times as much as John McCain on TV advertisements, sending the signal that giving up on public funds gives campaigns a big leg up.

The public financing system will lose its bite if, due to Obama’s success or Republicans’ ideological stance, it becomes the norm for candidates to reject it. In particular, its spending limits will become toothless, as the Supreme Court has ruled mandatory campaign spending caps unconstitutional. That is, if campaigns opt out of public funding, the government has no levers with which to keep their spending under control.

Of course, the Supreme Court has also reduced the government’s ability to stop campaign spending even when candidates do accept public funds. The court’s ruling in the Citizens United case that corporations can spend unlimited amounts on third-party political expenditures led to a fivefold increase in third-party campaign spending in 2010, a trend which is likely to continue into 2012.

Even if a candidate accepts public funding, then, they can just get their corporate supporters to spend in excess of the spending limits imposed by public financing. Candidates don’t even need to reject public financing anymore to make the system toothless.

Supporters of campaign finance reform, then, are in a bit of a fix. The current system is totally incapable of keeping large amounts of corporate money out of elections, and a stricter regime, with, say, non-voluntary spending limits and a ban on corporate spending, will not withstand a court challenge.

Some reformers, like Harvard Law Professor Lawrence Lessig, have expressed interest in amending the Constitution to enshrine Congress’ ability to regulate campaign finance. I understand the impulse, but the likelihood of such an amendment passing is trivially low, even without the current Republican majorities in the House and state legislatures. A better approach would seek ways, within the Supreme Court’s current interpretation of the Constitution, to regulate campaign spending.

Thankfully, Stanford Law Professor Kathleen M. Sullivan has proposed just such a third way. Her approach has three steps. The first is the abolition of all federal regulations governing elections, except those requiring transparency. This means no more limits to what an individual or any other group can give to campaigns, and no spending caps associated with public financing.

Anyone can give any amount to any campaign, and campaigns can use it however they like. This means that instead of creating third-party groups, corporations can give directly to candidates, who can then be held accountable for all spending undertaken on their behalf.

The second step is much strengthened disclosure. So, if Wal-Mart decides to give a sympathetic Senate candidate $50 million, they can—but the world has to know about it, and if they disapprove, Wal-Mart loses business. Finally, Sullivan proposes public financing for all elections, not just the presidential race. That way, every candidate will have enough to get their message out, and will not need corporate backing to get their foot in the door.

Now, it’s possible that campaigns will still engage in funding arms races, with public funds as just a small portion of their arsenal. But maybe not. Fundraising is a miserable activity that politicians universally despise. Given the choice between spending hours on the phones, dialing for dollars they do not absolutely need, and spending time with their family, I suspect most would choose the latter. It is worth noting that Australia and Germany have adopted roughly this system and have very clean political processes to show for it.

Republicans may balk at the public funding necessary for the proposal to work, but the potential for easier and less frequent fundraising may draw them in yet. If it does, the result would be a campaign finance system with which we can all live.

Dylan R. Matthews ’12 is a social studies concentrator in Kirkland House. He is currently studying abroad at the University of Cambridge.

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