ESSAY –McCutcheon and Campaign Finance Reform

The essay below originally appeared in The Weekly Wonk in April 2014, following the announcement of the Supreme Court decision in the case of McCutcheon v. FEC.


Campaign Finance Beyond McCutcheon

By Matthew Pinsker

The history behind the dramatic McCutcheon decision announced this week goes back even further than people realize.

The first time the U.S. Supreme Court addressed the problem of money in federal elections was during Ex Parte Yarbrough (1884) when Justice Samuel Miller delivered a sweeping and unanimous opinion which affirmed the power of Congress (under Article 1, Section 4) to fight political corruption by preventing “the free use of money in elections.” “If the government of the United States has within its constitutional domain no authority to provide against these evils,” the court observed, “then indeed is the country in danger.”

So, times have changed. When Miller first offered this clarion call against corruption, federal campaign finance laws were still in their infancy. There were no disclosure regulations, no contribution limitations, and no expenditure restrictions. Now we are about forty years into a more serious regime of statutory campaign finance reforms (1971, 1974, 1979, 1986, 2002), and the situation looks different –at least to five modern-day justices.

Chief Justice John Roberts suggests in the McCutcheon decision that the real danger to the republic now lies in the suppression of individual free speech. “Money in politics may at times seem repugnant to some,” he points out, “but so too does much of what the First Amendment vigorously protects.” The Roberts Court has made a determined effort to elevate free speech concerns over what the majority dismisses as the “asserted public interest” in a series of controversial 5-4 opinions on campaign finance cases (see Wisconsin Right to Life v. FEC (2007), Davis v. FEC (2008), Citizens United v. FEC (2010), and Arizona Free Enterprise Club’s Freedom PAC v. Bennett (2011) and now McCutcheon).

It is this flat refusal to see the inherent dangers created by the “free use of money in elections” that simply infuriates most progressive reformers.  Yet even the most ardent reformers should concede that modern history supports the Roberts analysis in at least one significant way. The connection between money and corruption is just not as simple as Justice Miller once suggested. American politics has always seemed to be awash with dirty money and yet the republic has somehow endured.

James Madison used to complain about expectations that as a young candidate he was supposed to stock local polling places with barrels of rum. Objecting to what he termed, “the corrupting influence of spiritous liquors, and other treats,” Madison at first refused to spend his inheritance on such gimmicks. So, naturally, he lost, and did not start winning until he began spending. Abraham Lincoln routinely grumbled about his fundraising obligations. “I am the poorest hand living to get others to pay,” he claimed. Honest Abe’s judgment was that in politics, “The use of money is wrong,” but nonetheless he raised and spent what it took to win. So did Harry Truman, who once found himself during the 1948 campaign begging for money right inside the White House, standing atop of a chair in the Red Room, no less. Over time, Truman became increasingly grumpy over the influence of big money in politics, and seemed especially appalled at the “$1,000-a-plate” dinners that John Kennedy’s team had introduced to the Democratic Party. “To hell with these millionaires at the head of things,” muttered the ex-haberdasher from Independence.

The expenditure categories have shifted. The numbers look different.   The rules have been reformed (again and again). Yet the complaints seem perennial. With this latest round of Supreme Court decisions essentially opening up a “Super PAC” avalanche, and with no sign of any good changes coming, our era seems as bad as any. The mood is certainly dour. But what is to be done?

One trademark of American political genius has always been the practical recognition that sometimes private vices can produce public virtues. Our system is literally built around the idea that allowing the greedy and the power-hungry to compete against each other is usually the surest way to contain their excesses. That same profound insight might apply to a new post-McCutcheon era of campaign finance reform. Yet until now, the premise of modern reform has been exactly the opposite of the vices/virtues formula –a truly Sisyphean effort to close loopholes, impose tougher disclosure obligations and establish ever more finely targeted limits.

Maybe the answer lies in a new approach. What if we just scrapped the idea of limits and introduced a federal campaign finance tax instead? Let’s create a tax system that aspires to use the unholy private activities of lobbyists, media consultants, interest groups, corporations, and “fat cats” of all stripes to help generate a more virtuous public campaign.

Here’s how it might work. Compel candidates, parties and designated political action committees to set aside and send a fixed portion of their large contributions into the general treasury. For tax exempt organizations (with undisclosed donors) or for wealthy individuals, who want to play in politics, let’s compel their vendors to withhold a fixed portion of their largest expenditures on any paid political advertising and send this money into the treasury as well. In that case, it would look just like a sales tax.   Back of the envelope calculations suggest that in a world where $7 billion was spent during the last election cycle, this new tax system would generate … a helluva lot of money.

That’s money we could earmark for long overdue federal election reforms. It would pay for recruiting and training better poll workers. It might help finance presidential-style debate commissions at the senatorial and congressional levels. The new money could be used to develop websites designed to improve voter awareness and mobilize smarter citizenship. It’s not even that difficult to imagine a grand bargain lurking somewhere in this new revenue stream. In exchange for an agreement by Republicans to spend public money on voter registration in poor and historically disenfranchised areas, Democrats might just be willing to divert some funds into improvements for ballot security and voter fraud prevention.

Okay, maybe that’s going too far down the rosy scenario, but any skeptic has to realize that we’ve got to try something big, something radically different with our campaign finance system.  This particular idea might seem novel and no doubt it would have to overcome serious arguments (and precedents) against coercive taxes on speech, but some legal scholars have called for a comparable approach, invoking what they usually term “corrective taxes” or “incentive-based regulations.”  Besides, despite all of its concerns for First Amendment rights, the Roberts court (so far) has left alone at least some contributions limits and caps, conceding there are no absolutes here. But perhaps most important at this moment, taxes represent the one area where the Roberts Court has provided some leeway for Congress.  As Chief Justice Robert wrote in his opinion on the Affordable Care Act, “The Federal Government may enact a tax on an activity that it cannot authorize, forbid or otherwise control.”  Progressives hailed that idea as a major victory in 2012.  Maybe it offers a template for bipartisan campaign finance reform as well.  Regardless, it’s long past time to admit that we’re now heading into a quarter millennium of American electioneering, and nobody has ever seemed happy with how we pay for it.


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