As this year's presidential and congressional elections turn inexorably into high-priced auctions, much attention has been paid to the fact that Democrats have in some respects achieved parity with Republicans in the money chase. According to the Federal Election Commission, as of March 31, Senate Democrats had raised $35.1 million in hard and soft money; Senate Republicans had raised $41.3 million. On the House side, Democrats were nearly even with Republicans in the soft money chase, $25 million to $27.5 million; Republicans were still well ahead in the hard money category, $45.2 million to $20.8 million.
But while everyone is talking about how this may affect the partisan composition of the next Congress, few people have noticed a more telling underlying change. The gap between business and labor contributions is widening dramatically.
In the last three full election cycles, 1994, 1996, and 1998, business outspent labor every single time in contributions to federal candidates and party committees. In 1994 corporate America spent $8 for every $1 that labor did. In the 1996 and 1998 elections, the ratio was $11 for every $1. The dollar amount of the gap between business and labor spending from the 1994 elections through the 1998 elections nearly doubled, from $307 million to $606 million. So far, in the 2000 election cycle, business is outspending labor by 15 to 1--the gap is already nearly half a billion dollars wide.
This fact is especially striking in light of organized labor's newfound energy and muscle. Of course, there's no doubt that "people power" can occasionally beat "money power" in politics, particularly when an issue is popular and receiving widespread attention. Witness the passage of a dollar increase in the minimum wage in 1996 by the Republican-controlled Congress. But the bottom-line picture for labor on Capitol Hill is not great.
Not a single member of the U.S. Senate received more contributions from labor interests than from business interests between 1993 and 1998, a full Senate election cycle. Only 20 members of the House of Representatives--5 percent--received more campaign funds from labor than from business during the 1998 elections.
Here's another angle. In the 1998 elections, the average amount spent by a winning candidate for the House of Representatives was $650,428. Only six members of the House received $325,000 or more--half of the average winning amount spent--from labor interests, and the most any winning candidate received from labor was $448,000. In contrast, 15 winning House members received $1 million or more from business interests; 126 received $500,000 or more; and 239--more than half of the House membership, including 92 Democrats-- received $325,000 or more.
What's at stake? The recent battle over China trade is a case in point. On May 24, the House voted 237 to 197 to grant permanent normal trade status to China, despite fierce opposition by organized labor. House members who voted "yes" received an average of $44,000 in PAC and individual donations this election cycle from members of the Business Roundtable, which lobbied hard for passage of the bill, according to an analysis by the Center for Responsive Politics. Members who voted "no" received an average of $25,000. The 200-plus companies in the Business Roundtable outspent labor easily, giving more than $58 million to candidates and parties in the 2000 election cycle to date, while labor has given approximately $31 million. The source of a lawmaker's money made a difference. Among the 188 legislators who received more campaign money from labor than from business interests, 73 percent voted "no."
Judging by a new policy statement issued by the AFL-CIO's executive board, organized labor is coming to understand that campaign finance reform is an urgent priority--even for a group that has long been an effective player in the money game. The statement endorsed full public financing for congressional elections, including primaries, as well as limits on individual contributions and a ban on soft money. But, as we'll describe in our next column, while the issue of reform continues to percolate on Capitol Hill, there is a proposal lurking, backed by some Democrats as well as Republicans, that would raise contribution limits and tilt the playing field even further from labor and working people.