Supreme Court Leaves One Path for Campaign Reform – the Best Path

This post originally appeared at New Deal 2.0, the blog of the Roosevelt Institute. Sign up for weekly ND20 highlights, mind-blowing stats, and event alerts.

The Supreme Court’s decision in Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett(also known as the McComish case) is yet another ruling overturning a key aspect of a campaign finance law — in this case, a provision of Arizona’s public financing system. As Heather Gerken notes at Balkinization, the decision itself, and the sniping it elicited between Chief Justice John Roberts and Justice Elena Kagan, show a court divided between two incompatible views of money in politics: four justices who see it as a dangerous force that should be subject to reasonable regulation, and a majority that sees it as nearly a pure form of free expression.

But Monday’s decision in itself doesn’t do any harm to the most effective campaign finance systems, and it could even be a good thing. Now there’s only one form of campaign finance regulation that’s likely to pass the Court’s muster — and fortunately, it’s also the kind that’s most likely to work. That is, reform that reduces the influence of big donors and makes it easier for candidates without rich backers to run for office and be heard.

The provision at issue in the Arizona case gave extra funding to a candidate who participated in public financing but faced an opponent who didn’t, or who was attacked by outside spending, by matching the opponent’s funds. The purpose wasn’t so much to “level the playing field” (which the Court majority found to be an impermissible rationale) as to make the public financing system attractive to candidates. Arizona offers “full” public financing, which means that once a candidate qualifies (by collecting a number of $10 contributions to show broad support), she gets a fixed amount of money to campaign, usually based on the average spent in previous elections. By accepting the public money, she agrees to take no more private money beyond the qualifying contributions.

Full public financing is a brilliant solution if the goal is to almost completely rid elections of the influence of private money. Under the Supreme Court’s 1974 decision Buckley v. Valeo, such a system can only be voluntary. But agreeing to a fixed sum for a campaign is a risky choice for a candidate. The amount may have been enough to win in a previous election, but what if a wealthy opponent comes in with millions to fund his own campaign? What if an outside group, like Karl Rove’s American Crossroads, appears in the last week and starts buying up television time? Without some insurance against that deadly possibility, most rational candidates will hesitate to participate in public financing, despite its advantages.

Arizona’s matching funds provision provided that insurance. Even so, it didn’t work perfectly; while participation in the system has increased in every cycle since the program was enacted in 1998, even in 2008, 36% of candidates for the legislature and a majority of incumbents chose not to participate. Without the insurance of matching funds, even fewer candidates will participate.

But full public financing isn’t the only way to reduce the influence of money and make it easier for candidates who don’t have rich backers to be heard. More flexible systems don’t try to block private money entirely, but instead encourage small donors by providing tax credits (Minnesota, for example, refunds contributions of up to $50 through the tax system, making it the equivalent of a voucher for politics) or by using public money to boost small contributions (New York City gives candidates a six-to-one match on contributions under $175). Systems like these make it worth the candidates’ time to seek out small donors. In Minnesota, 45% of donors give $100 or less, compared to 2% in California. These systems aren’t perfect — there are still some big donors, and Michael Bloomberg has been elected mayor of New York three times without participating — but more than 90% of candidates do participate in these systems. Because they are flexible (they don’t require candidates to agree to accept a fixed sum) they don’t need the insurance policy of Arizona’s law.

In the last Congress, a majority of House Democrats and a few Republicans signed on as cosponsors of the Fair Elections Act, which combines some aspects of full public financing with a matching system like New York City’s. These systems are not only safe from all the arguments leveled by the Court majority yesterday or in Citizens United, they are also the best way to attract candidates and small donors to a system in which big donors would have less influence. A few years ago, these systems were not fully appreciated — reformers were more interested in getting money out of politics than boosting small donors. But now they are the only path left for campaign finance reform and, fortunately, the best path.

Mark Schmitt is a Senior Fellow and Director of the Fellows Program at the Roosevelt Institute.

New Deal 2.0 / By Mark Schmitt

Posted at June 30, 2011, 10:59am

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