Public Financing of Elections

The Washington Monthly, January/February 2007

The Machiavellian case for public financing of elections.

By Zachary Roth

Early this summer, in one of the periodic manifestations of the herd mentality for which this city's pundit class is known, official Washington decided that corruption didn't matter. The main piece of evidence for this conclusion was the special election in June to replace Randy "Duke" Cunningham, the California Republican congressman who months earlier had been convicted of bribery. The Democratic candidate had made issues of ethics and influence the focus of her campaign—and wound up losing to a former GOP lobbyist. "The culture of corruption isn't selling," declared Slate's John Dickerson the following day, referring to the Democrats' label for the Republican scandals of the previous year. Democrats largely accepted the new conventional wisdom, deciding merely to check the box on corruption, rather than making it a focus of their pitch to voters. As the campaign wore on, they invoked the "culture of corruption" less and less frequently. Several Democratic strategists told me before the election that they just didn't think people cared that much about the issue.

As it turned out, both the pundits and the party were wrong. In official exit polling, more voters named corruption as an extremely important issue than any other, including Iraq. Since then, some pollsters have challenged the way the question was asked on the survey, and expressed doubts that concerns about corruption really did outweigh those about the war. But no experts deny that the issue played a much more crucial part in the Democratic win than almost anyone had expected.

Without really asking for it, then, Democrats have been given a mandate by voters to clean up Washington. Rather than running with it, however, the party is poised once again to check the box on corruption. Democratic leaders have announced that, in their first 100 hours in office, they'll introduce an ethics- and lobbying-reform package that would ban lobbyist-financed gifts, meals, and travel; mandate disclosure of all member contacts with lobbyists; and address the problem of earmarks by requiring that the sponsors of funding for home-state pet projects be identified, among other steps. These measures are a clear improvement on the toothless approach embraced by congressional Republicans in the wake of the Jack Abramoff scandal last year. But few seriously believe that they get to the heart of Washington's influence problem. That problem will exist as long as elected officials must raise large amounts of money to run for office from the organized economic interests they're supposed to be regulating. That's why any serious effort to clean up Washington must break the connection between money and elections.

The only way to do that is to provide candidates for office with public revenue to run their campaigns. Such a system of public financing has been the brass ring for reformers for three decades. Versions of public financing have been passed in both Arizona and Maine, where candidates for legislative and statewide offices can receive campaign dollars from the state treasury (see "How Public Financing Works," page 38). Having been beta-tested, and shown to work effectively, over half a decade at the state level—and now that the issue of money in politics is at the height of its public awareness thanks to the sins of the Republican Congress—this is the perfect time to take the system nationwide.

But despite the efforts of some committed reformers in Congress, neither chamber's Democratic leadership appears likely to put the issue squarely on the agenda during this session. The office of Speaker Nancy Pelosi (D-Calif.) told me that, though she herself supports public financing, she has not yet decided to make it a "caucus position"—and she has conspicuously failed to sign a public-financing pledge being circulated by good-government groups. Senate Majority Leader Harry Reid (D-Nev.) has been no more enthusiastic.

This is a crazy decision. Leave aside the fact that, without public financing, you can't begin to reform Washington's pay-to-play legislative system. Leave aside the fact that major progressive policy goals—from universal health care to a fairer tax code—probably can't be achieved without public financing. Leave aside, even, the fact that the current system, which winds up giving outsized political influence to those who can afford to fund campaigns, is a grievous affront to the ideals of the founding fathers. Focus instead on what is, to elected officials, the most important consideration of all: crass political advantage.

By failing to unite behind public financing, Democrats may be blowing a once-in-a-lifetime opportunity to, as President Bush is wont to say, "change the game" of American politics in their favor. It's no accident that the rise of conservative power in Washington that began in 1980 and accelerated after 1994 coincided with an exponential increase in the cost of political campaigns. Any system that uses corporate dollars to fund candidates' bids for office will, almost by definition, advantage the party that hews closest to corporate interests. Over the last 12 years, Republicans have figured out how to exploit that dynamic to build a political machine with which they have dominated their opponents. Now that Democrats are back in power, they have a choice: They can try to adapt to that system by going all out to get their share of the spoils. Or they can destroy it altogether by cutting off the money on which it depends.

Partisans for public financing

Today, many in Washington see public financing as the province of earnest good-government types—the kind of people who live in older northeastern suburbs, and lobby their town council for safer swing-sets. But the issue's first modern-era champion could hardly have been further from that image. Sen. Russell Long—the son of Huey P. Long, the legendary Louisiana governor who built a machine that dominated state politics in the 1920s and '30s—was a hard drinker, wily political operator, and close ally of LBJ, who understood how public financing could be used as a political tool. In 1966, concerned about the Republicans' growing ability to out-raise his party, Long proposed a system that would have provided federal funds for presidential and congressional candidates who agreed to spending limits. His bill passed, but Congress voted the following year to make it inoperative pending further review—thanks in large part to the fears of Sen. Robert Kennedy and his supporters that it would reduce the advantage of candidates with large amounts of private money. A year later, Sen. Kennedy used much of his family's private fortune to challenge LBJ for the Democratic nomination.

The issue reasserted itself after the Watergate scandal—in which the Nixon White House used anonymous campaign contributions to fund a slew of political dirty tricks, including the break-in at the Watergate building itself. In 1977, majorities in both houses of the Democratic Congress supported a new public-financing proposal, but Senate Republicans filibustered the bill. That set a pattern. Over the ensuing 17 years, various legislative efforts on public financing attracted majority support, only to be filibustered to death by Senate Republicans.

The GOP has consistently opposed public financing over the years, in part out of a stated ideological aversion to all but the most essential forms of non-defense-related public spending. But there's little doubt that much of the Republican opposition derives from the accurate assessment that the existing private system favors them. In 1988, Sen. Mitch McConnell (R-Ky.)—today the Senate GOP leader and the standard bearer for the party's opposition to all forms of campaign-finance reform—admitted as much: "What this is all about is a struggle for partisan advantage," he told Jim Lehrer. Democrats, McConnell said, "don't do as well with…contributors as we do."

Finally, in 1992, thanks in part to the efforts of Senate Majority Leader George Mitchell, Democrats overcame the filibuster, only to see President George H.W. Bush veto the bill. Movement conservatives always hated the elder Bush, but without this veto, which preserved the private system, they almost certainly could not have come to dominate the political landscape over the next 15 years as completely as they did.

In truth, though, by the early 1990s, many Democrats had grown less enthusiastic about public financing. Over the preceding decade, Rep. Tony Coelho, in his role as chair of the Democratic Congressional Campaign Committee, had led an effort to increase the amount of corporate money the party raised. Coelho's success convinced Democratic House leaders Tom Foley and Dick Gephardt that the system of private financing could be made to work for their party. Many reformers believed that Foley and Gephardt only allowed the 1992 bill to pass because they were confident that it would be vetoed.

Indeed, the following year—with a Democrat in the White House who had pledged his support for reform—Foley did not let public financing out of the House. President Clinton, sensing a tough inter-party battle, chose to spend his limited political capital elsewhere. That proved a crucial turning point: With the system of private financing now unchallenged, Republicans—after taking Congress in 1994—had free rein to build the political machine they would use to dominate Democrats over the next decade.

That machine works as follows: First, Republican leaders pressure major K-Street lobbying shops to hire loyal GOP lieutenants—usually former congressional aides—in place of the pragmatic corporate executives who used to be in charge. That allows the party to subsume K Street's vast resources—its lawyers, lobbyists, PR professionals, and, most important, its money—into the Republican political operation. Through their allies on K Street, GOP leaders can ensure that lobbying firms give the lion's share of their donations to Republicans—helping to perpetuate the party's political dominance. The numbers speak for themselves. In 1993, when Democrats controlled Congress and the White House, 19 key industries—including accounting, pharmaceuticals, and defense—gave roughly evenly between the parties. By 2003, they gave twice as much to Republicans as to Democrats.

A closer look at the numbers makes the GOP's money advantage—particularly after 2000 when it had also captured the White House—even clearer. In the 2002 cycle, Republicans out-raised Democrats by over one third, according to figures provided by the Center for Responsive Politics, and which include contributions to individual candidates, to the parties themselves, and to their various committees. In 2004, Republicans out-raised Democrats by almost one quarter. And in 2006, when Democrats appeared likely to retake Congress, Republicans still had an advantage of almost 14 percent. In other words, even in a year when Democrats were favored, the GOP comfortably won the money race. And in the years when Democrats were the underdogs, it wasn't even close.

Goodbye to all that

A system of public financing would even out the financial playing field that now favors Republicans so decisively. This is no small thing: Over those last three election cycles, the House candidate who spent more money won almost 95 percent of the time. "In a system where big money and the ability to raise big contributions is dominant, those who have access to that big money are going to do better," says a senior Senate Democratic aide. "And on a really broad scale, that's Republicans, not Democrats."

But more than that, public financing would deal a death blow to the machine itself. Of course, lobbying groups will still have ways of exerting influence outside of the campaign-finance system—by, for instance, running fake grassroots campaigns in support of favored causes, as the pharmaceutical industry did in 2003 to help pass the Medicare drug bill. Without campaign contributions, however, the top-down control on which the system depends would quickly unravel. That's because contributions, unlike other forms of assistance, can legally be coordinated between the donor and the recipient. It was this ability to coordinate that let GOP leaders establish themselves as the funnel for corporate money. Since they then had the power to distribute that money, they could all but compel members to vote with the party. And that, in turn, allowed them to tell K Street: Support us and our agenda completely if you want Congress to support yours. Take away the money, and that two-way discipline vanishes—and with it the machine itself.

Public financing would also help Democrats in a less quantifiable, though perhaps equally important, way. It's hard to deny that, for all their recent success, Democratic candidates can still sometimes appear vacillating and less sure of their principles than their Republican opponents. One reason why is that the private campaign-finance system not only favors the GOP in real terms, but also forces Democrats to talk out of both sides of their mouths when campaigning. Currently, Democrats—especially the more progressive ones—must ask for votes by claiming they'll stand up for working people, while at the same time, though more subtly, keeping one eye on the interests of their corporate benefactors. The results, though rarely scandalous, can often be embarrassing, as when Harper's recently noted Sen. Barack Obama (D-Ill.) selling student environmental activists on the virtues of a renewable fuel based on ethanol—the use of which benefits one of the senator's major contributors, Illinois-based Archer Daniels Midland. Because Republicans make less claim to represent the interests of working people, this conflict is far less acute for them. A public-financing program would get Democrats out from under this oppressive system, which forces them to compromise their ideals—or at least creates the impression that they're doing so.

Finally, public financing will help Democrats politically simply by making it easier for them to pass their agenda. In recent years, the party has at times failed to stay united on major economic votes like the bankruptcy bill of 2005, in part because some members have caved to their corporate backers. If Democrats hope to fix the Medicare drug plan or repeal some of the Bush tax cuts, they'll need to reduce these defections. Ending the link between corporate money and elections will make it easier for Democrats to side with their constituents, not their contributors. And creating a record of legislative accomplishment is perhaps the most effective way for Democrats to boost their political prospects.

Of course, for the next two years, with President Bush in the White House and Democrats with only the narrowest of majorities in the Senate, there's no real chance of passing public financing. But Democrats can use this period to define for the press and public what real reform means, and to unite behind it, with an eye to passing legislation after 2008. And in the meantime, firmly planting their flag for reform will bring rewards of its own.

First, getting behind public financing will help inoculate Democrats from the charge that they're no less corrupt than the GOP. Inevitably, over the next few years, another William Jefferson—the Louisiana Democratic congressman who is being investigated for corruption by the FBI—will emerge. Just as inevitably, Republicans will react by charging that Democrats are no purer than their predecessors—and the media, always afraid of appearing biased, will echo that line. (A San Francisco Chronicle editorial from November offered a preview: "History suggests that a party coming into power by running against a 'culture of corruption' will be no less vulnerable to its temptations once the euphoria of the election subsides.") When this happens, the only truly effective response to these charges of equivalence is for Democrats to assert the need for fundamental reform of the system—reform that Republicans will not support. Doing so would make each Democratic impropriety not an embarrassing deviation from the party's agenda, but rather, another compelling piece of evidence for it.

Second, championing public financing could also help Democrats defend themselves against another set of charges from Republicans and the press: that their conduct of congressional oversight is vindictive and backward-looking. Even during the campaign, the GOP preemptively trotted out this line of attack, repeatedly warning that Democrats' endless partisan investigations would plunge the nation into turmoil. This spin won't work, though, if Democrats use the hearings not just to shine a spotlight on a rotten system but to propose solutions for fixing it. Most of the major areas that Democrats will investigate—waste and fraud in Iraqi contracting, the slow pace of post-Katrina reconstruction, and the flawed Medicare drug bill, for instance—are a direct result of connections between Republicans and their corporate contributors. By uniting early around public financing as the only permanent solution to endemic cronyism and corruption, Democrats can enhance their ability to exercise their constitutional powers of oversight.

Finally, a concerted Democratic push on public financing could exacerbate damaging rifts in the Republican party. The GOP leadership, and the vast majority of rank-and-file members in both houses, will oppose reform. That will force the party's presumptive presidential front-runner, Sen. John McCain (R-Ariz.), to make a choice. Either he can side with his Republican colleagues and risk losing his image of independence and integrity—forged in large part through his leading role in the last major campaign-finance reform, the soft-money ban of 2002. Or he can support public financing, once again putting himself at odds with his own party—at the very time that he'll be trying desperately to prove his Republican bona fides in advance of the primaries.

Take one for the team

Some Democrats do want to move forward with public financing. Obama, perhaps the party's most charismatic spokesman and a possible 2008 presidential contender, is a strong supporter, and Sen. Dick Durbin (D-Ill.), now the Senate number two, is working on a public-financing proposal which he intends to introduce later this session. (Rep. John Tierney (D-Mass.), a longtime public-financing supporter, has already introduced a similar measure in the House.) Though Pelosi has not signed the pledge to back public financing, 101 Democratic House members, including 23 out of 41 incoming freshmen, have.

Yet despite the fact that almost three in four voters support public financing, according to a recent poll commissioned by the good-government group Common Cause, many lawmakers remain wary. "Right now, there aren't 25 votes [in the Senate] for a full public-financing system," a senior Senate Democratic aide told me. There are three major reasons for this reticence.

First, some see it as quixotic. Why spend political capital on an effort that's certain to fail? In fact, though, it's not hard to envision how public financing could come about.

To begin, Democrats would need to win the White House in 2008, for which their prospects currently appear strong. Then, in order to overcome a filibuster, they would need 60 Senate votes in support. That's more viable than it might at first appear: In 1992, Democrats broke a filibuster at a time when they held 55 Senate seats. Today, they hold 51 but appear likely to make gains in the next election, when 21 Senate Republican incumbents, and only 12 Democrats, are up for reelection.

And there's reason to think that public financing could attract as many GOP defectors as it did in 1992. It's not just northeastern moderates like Maine senators Olympia Snowe and Susan Collins who might be receptive to the idea. More intriguingly, the GOP's social-conservative base has in recent years begun to feel taken for granted by their party, which depends on them to win elections but has routinely sided with its financial backers on issues from gambling to global warming to predatory loans. In the context of a congressional fight over public financing, the movement's grassroots activists could easily come to see the system as a way to reduce the influence of corporate interests on the GOP, and consequently strengthen their own hand. That could be enough to sway socially conservative Republican senators like Tom Coburn of Oklahoma and Sam Brownback of Kansas.

Another reason that Democrats are reluctant to get behind public financing is the thought of asking voters to foot the bill. It's one thing to ask the American people to fund a highway—quite another to suggest that they pay for negative campaign ads for politicians. This is an understandable concern, and one that was clearly on members' minds when Congress created a public-financing system for presidential candidates in 1974. Instead of tapping general revenues, that system asks Americans to voluntarily check off contributions on their tax forms. It worked well for two decades, but in recent years, the number of people who check the box has declined. As a result, the amount of public funds provided has not kept pace with the increasing cost of campaigning. In 2004, both major party candidates opted out of the system, calculating, correctly, that they could raise more money privately.

But there's no reason why taxpayers should be getting stuck with the tab in the first place. As former Clinton domestic-policy director Paul Weinstein has written (see "You Break It, You Pay For It," The Washington Monthly, November 2002), the costs of fixing the system ought to be borne by those who have warped it. A $2,000 annual fee levied on lobbyists, PACs, political consultants, and government contractors, Weinstein observes, would net a public-financing system at least $1.9 billion every election cycle—more than enough to pay for every congressional race. If members of Congress could tell voters that Washington lobbyists—not ordinary Americans—were paying for public financing, much of their reticence would vanish.

Finally, many Democratic incumbents have always been wary of public financing because it would likely advantage challengers over incumbents. "There's no doubt that's a concern quietly expressed by some of the opponents," says Rep. Chris Van Hollen (D-Md.), another leading public-financing supporter. But if Democrats want to give themselves a chance to remain in power, members must sometimes put partisan interest above self-interest. That's an area where they've been outplayed by Republicans—often pressured by hard-nosed leaders—in recent years. The parties' contrasting approaches to redistricting are the best example: When Republicans have controlled the process in recent years, they've tended to draw the boundaries in a way that makes their own incumbents slightly less safe, but maximizes the party's overall chances of gaining seats. Democrats have generally done the reverse: making their own incumbents more secure at the cost of picking up new seats.

There are some traits that were central to the Republicans' political supremacy over the last decade—the corruption, the majoritarianism, the viciousness—that Democrats should not to try to replicate, either for their own good, or for the country's. But there are others that they should. If Democrats want to ensure that their takeover of Congress represents a genuinely new political era rather than a temporary hiatus from GOP dominance, they need to match Republicans' ability to strategically pick issues and tactics that help reconfigure the underlying political tectonics in their favor. Karl Rove made tort reform one of George Bush's top priorities in both Austin and Washington not only because the issue helped secure financial support from the medical and insurance industries, but also because it hurt trial lawyers, a major Democratic funding source. A system of public financing could shift the political ground in Democrats' favor in an even more profound way. By November 2008, we may be largely out of Iraq, and Jack Abramoff may be no more than the answer to a trivia question. Without those two factors, Democrats, under the current system, will once again be at risk of finding themselves out-muscled by the Republican money machine. They have a chance to make sure that never happens again. Not taking that chance would be the ultimate blown opportunity.

*****

How public financing works

There are numerous approaches to providing public financing, but the most viable would be an optional system in which, to qualify for public funds, a candidate would be required to show a basic level of grassroots support and organization by collecting a certain number of small (probably around $5) contributions. He would then be given a grant for the primary campaign and a separate grant for the general. If his opponent chose not to participate in the system, the participating candidate would receive "fair-fight funds," allowing him to stay competitive. Equally, if any outside group—from the Republican National Committee to the Chamber of Commerce—spent money in support of the non-participating candidate, the participating candidate would receive a check for the value of that spending.

Zachary Roth is an editor of The Washington Monthly.