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Campaign Finance Reform

While the issue of campaign finance reform barely registers in public opinion polls, many politicians and the media tell us reform is critical to the future of democracy in America. However, it is clear that they believe this is true only insofar as we accept the version of reform demanded by these same politicians and the media — public financing, contribution and expenditure limits, and an end to all independent expenditures. This version of reform will have little impact other than to stifle political debate and to further corrupt our political system. Instead, serious reformers should accomplish the effective liberation of campaigns and elections from arbitrary limits on the flow of money, information, and access.

Some critics of North Carolina’s current finance system say that both wealthy individuals and political action committees (PACs) exercise too much influence over candidates. Other critics, however, argue that the current system, by limiting individual contributions, forces candidates to spend too much time fundraising rather than discussing issues, thus making PACs a more important source of campaign funds than they should be. They also contend that restricting private financing of campaigns is a violation of freedom of speech.

The Problem With Contribution Limits

The essential difficulty with current campaign finance laws is that they distort the political process. They give incumbents an electoral advantage and divert their attention from the execution of their constitutional duties in favor of an undue concentration on the need to finance future campaigns. Additionally, the laws discourage the average citizen, who often feels disenfranchised, from his responsibility to develop an informed base of knowledge with respect to what government is either authorized or able to do effectively.

Direct spending and contribution limits on campaigns are morally questionable and constitutionally suspect. Despite the U.S. Supreme Court’s Nixon v. Shrink Missouri Government PAC ruling, the highest court in the land should not be issuing edicts restricting the ability of American citizens to politically express themselves. This is the principal protection intended by the First Amendment. There are also more practical objections to any such limitation on financial support for a candidate. The real questions are: Do we wish to have an unelected judiciary determining the nature and extent of the political speech upon which our elections depend? And should such arbitrary restrictions append short of extensive and thorough public debate?

In essence, neither contributions to nor expenditures by political candidates or campaigns should be subject to any limits whatsoever. Unlimited financing and broadcasting of political speech is critical to the health of a free republic. So long as full and immediate disclosure is mandated and, in its absence, commensurately and severely punished, there is simply no logical or justifiable case to be made for anything less than unlimited, voluntary, and private campaign financing by free citizens in a free nation or state. Nonetheless, candidates must be held fully accountable for both the nature and use of whatever contributions they receive.

The Problem With Expenditure Limits

Campaign expenditure limits are as unacceptable as contribution limits. There are two aspects to this issue. While the U.S. Supreme Court has ruled that campaign expenditure limits are unconstitutional, this remains a double-barreled issue because there are two schools of thought tied directly to the issue of public financing of campaigns. If one accepts the constitutionality or even moral probity of some form of public financing, does this leave the system open to the further distortions of limited, publicly financed campaigns competing against unlimited, privately funded campaigns? And, if that is the case, is it truly a problem?

If a candidate accepts public funding for a campaign, he accepts a limit on expenditures and on private funding. There may be an argument for imposing such limits only if a candidate accepts public funding of his campaign. The issue is whether taxpayer funding is constitutionally acceptable. Such proposals are often based on two perceptions: 1) that too much money is spent on campaigns and 2) this money corrupts our politics. Aside from the moral issue of forcing taxpayers to pay to promote ideas they may vehemently oppose, the actual dollar expenditures of campaigns, although growing over time, are relatively small.

Candidates for federal office spent approximately $3 billion in 2000 and will apparently spend far more in 2004. But such spending amounts to about one-eighth of what Americans spend annually on cosmetics. Americans spend more on Nike shoes, lipstick, and personal fitness trainers than on all local, state, and federal elections combined. In North Carolina, expenditures in legislative campaigns have increased significantly in percentage terms — the $17 million spent in 2002 was more than three times the total spending in 1994. Yet the numbers remain modest, an average of $100,000 per race in 2002, when one considers that the state legislature makes major decisions with broad and lasting implications.

Nationally, campaign spending represents only about .05 percent of the gross domestic product. To suggest that too much money is raised and spent to elect public officials who set the law and have such immense power over our economy and our lives is to suggest that dispensable consumer products are more important than electing the people who make our laws. Campaign contributions fund events, mailings, television ads, and other forms of communication. The right of an individual to spend his or her own money to communicate a political message to voters is indistinguishable from that individual’s right to participate in political debate. Such contributions are simply an exercise in First Amendment rights. What’s more, limits on contributions or their replacement with taxpayer financing would only lead to more independent expenditures by individuals or interest groups on behalf of their favorite candidates and causes — a phenomenon already present in federal races after the passage of the McCain-Feingold law supposedly banning “soft money.” Unprecedented sums of such large contributions have simply flowed to “527s” and other independent groups.

There are two reasons politicians must spend so much time raising money. One is that government is far too powerful and so private interests vie for political influence to a far greater degree than they would if government were to stay within its constitutional confines. More often than not, donors financially support and vote for politicians based on the degree to which they already agree with particular candidates. Donors are interested in increasing access and in bringing attention to those matters which most concern them. This is also true of most voters. The question is how to most effectively address the concern that people believe politicians are corrupted by the process and that voters are somehow excluded from any true influence.

In 2003, the North Carolina General Assembly enacted a law that, in the minds of many self-styled reformers, set a key precedent. The bill created a public-funding system for candidates running for the Court of Appeals or Supreme Court. The funds were originally to come from voluntary contributions by attorneys and a checkoff on tax forms, and were to fund a statewide informational mailing and other activities by candidates opting into the system. But the amount received has proved to be significantly lower than what is needed to fund adequate campaigns. Inevitably, some legislators have therefore called for forcing attorneys or taxpayers to fund the new system. This would be a horrible idea, as was the bill‘s other big change: stripping party labels off the appellate-judge races. This takes information away from voters and will reduce their participation, and was a transparently partisan attempt by Democrats to halt Republican gains in judicial elections.

Recommendations

1. Policymakers should replace the existing campaign finance regime with a system allowing unlimited donations and requiring full, immediate disclosure of the amounts and sources of all gifts.
2. Public officials worried about the corrupting influence of campaign contributions should work diligently to decrease the reach and authority of government at all levels so that so-called “special interests” will no longer feel required to curry favor with legislators and executive branch officials.