Of our Time: Democracy v. Dollar

Democracy, many people have said, is a matter of faith,
but why, dear Lord, must our faith be tested so often? Lately,
the role of money in political campaigns has been mocking our
civic creed. "Here the people rule," we are taught,
and we would like to think so. But if the voters (and nonvoters)
seem disbelieving, they may merely be acquainted with the material
facts of political life. Congressional candidates in this last
election cycle raised $1.3 billion, which is a lot of money to
change hands with pure intentions. Fiorello La Guardia, New York's
reform mayor of the 1930s and '40s, once said that politics requires
"supreme ingratitude." That's just the problem. Among
those who run for office, ingratitude may not be common enough.

In many respects, the United States is positively fastidious about
the influence of money on public officials. Federal employees
cannot legally accept even trivial gifts from the public. They
risk prosecution if they allow someone to pay for a meal or serve
them food that costs more than $20 in the course of a year. During
my brief sojourn in government four years ago, I had to listen
to a hermeneutic discussion of the donuts-and-coffee exception
to this rule (is a bagel a "donut" for purposes of federal
law if not in the eyes of cream cheese?). Yet candidates are expected
to raise large sums from private contributors, all the while pretending
that their constant hunt for money does not influence their views
of policy. We might as well make hypocrisy a formal requirement
for elected office.

The scandals that have filled the newspapers and airwaves this
past year are not just symptoms of the deeper problem; they are
also a distraction from it. What a simple issue this would be
if the malady could be cured by ensuring that money raised for
tax-exempt purposes was kept from partisan political use and that
no money came from foreign sources. Of course, those who break
the law must be brought to full account. But the real scandal,
in Michael Kinsley's aphorism, is what's legal—indeed, what's
inevitable under pressures of political competition. And the real
story is what hasn't been news: the triumph of money in the 1996
election and the increased financial asymmetry between the parties.


Recent reports from the Center for Responsive Politics and Citizen
Action on the role of fundraising in the fall election describe
a world that does not exactly correspond to our cherished image
of popular sovereignty. In House races, the candidate who raised
the most money won 92 percent of the time; in Senate races, 88
percent. In effect, we held two elections: the first, a competition
for dollars; the second, for votes. Those who won a majority of
the money were overwhelmingly likely to win a majority of the
votes. To be sure, causation often runs the other way: Likely
winners attract contributors. Thus the preponderance of money
among the winners does not prove that money made the difference.
But even in races that independent analysts rated toss-ups before
election day, money was overwhelmingly correlated with victory.
And in financial terms, many elections weren't remotely competitive.
The fundraising winners often enjoyed so overwhelming an advantage—40
percent of House incumbents outspent their opponents at least
ten to one—that the popular election was little more than a charade.

A seat in Congress does not yet carry tenure, but it comes close.
According to the Citizen Action report, in the races for the House,
only 19 challengers (5 percent) were able to raise more money
than incumbents in the 381 districts where incumbents ran. In
these 19 races, 8 challengers won, a success rate of 42 percent;
but in the remaining 362 races, only 13 challengers won, a success
rate of only 4 percent. Thus a challenger who lost the "money"
election, as 95 percent did, had slim chance of prevailing in
the people's election. This was scarcely surprising since winning
incumbents raised an average of $761,000, 3 times the average
of $221,000 raised by their opponents. It took an average of over
a million dollars to beat an incumbent. Raising that much money
is so daunting a task for most potential challengers that the
possibility of competitive elections has been effectively nullified
in the majority of districts.

In this column in our last issue, I noted that the total national
vote for Republican and Democratic candidates for the House in
1996 was almost even, but that Republicans retained a majority
in the House because of the way in which votes were distributed.
The Republicans won the great majority of tight races, while votes
for Democrats were clustered in districts that they won by lopsided
margins.* Now that we have the data on campaign spending, the
explanation for the Republican success in tight races seems less
ambiguous. Here, for example, are three key findings from the
Citizen Action report:

  • In the 60 congressional seats (41 of them previously held by
    Republicans) that the Cook Political Report rated "toss-ups"
    before the election, Republican candidates had an average of 42
    percent more money to spend, raising an average of over $1 million
    per district. Democrats were able to win back only 12 of the Republican
  • Republican freshmen defending their seats in 1996 spent almost
    twice as much as their Democratic challengers.
  • In the ten closest races won by Republicans, they held a 56
    percent spending advantage.

Before 1994, contributions from political action committees (PACs)
were split roughly in half between the two major parties, as congressional
Democrats used the advantages of incumbency to offset the affinity
of business for Republicans. But after Republicans took over Congress,
they garnered two-thirds of PAC contributions. The old balance,
never ideal since it depended on Democratic incumbency, has disappeared
in congressional elections (although it remains at the presidential
level because of public funding). The question now is whether
reform can not only reduce the power of money, but also bring
about a new and more equitable balance between the parties.

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Campaign finance reform is the precondition for progress on many
other fronts, as environmental and other progressive organizations
have increasingly recognized. But in no other area is the path
to reform so treacherous. Popular disgust with the present system
may someday kindle a political firestorm. The immediate reality,
however, is that the forces of reform confront not just the power
of money, but also the entrenched self-interest of incumbents
in blocking any legislation that lessens their chances of re-election.
As if that were not discouraging enough, any reform measures also
have to overcome or sidestep the obstacles created by the Supreme
Court's decisions in Buckley v. Valeo and Colorado Republicans v. FEC, which have effectively made it impossible to
limit campaign spending by barring any restrictions on "independent"
expenditures—even, amazingly enough, by a candidate's own political

Moreover, the movement for reform is badly divided and seems likely
to dissipate much of its energy in misguided initiatives. Some,
for example, are campaigning for a constitutional amendment to
undo the Supreme Court's precedents and permit Congress to limit
expenditures on political campaigns— a dangerous measure that would
invite future restrictions of political speech through overbroad
interpretation. If Congress has the authority to limit spending,
it may set such low limits that challengers cannot spend enough
to become as well known as incumbents. Considering the history
of incumbent self-protection, this hardly seems a hypothetical

Other groups, such as Common Cause, want to pass the McCain-Feingold
bill, which would eliminate PACs and offer candidates half-price
TV advertising time in exchange for voluntary limits on spending
and out-of-state contributions. But McCain-Feingold offers no
public financing and would force candidates to devote just as
much time and energy to fundraising as they do today (except that
money would at least nominally have to come from individuals).
Much business-related money already comes in the form of individual
contributions; business would still be able to use corporate communications
to drum up support for political candidates and to elicit contributions
from employees concerned about pay and promotions. It's labor
that most needs PACs to aggregate small individual contributions.
The premise of McCain-Feingold is that individuals should contribute
to political campaigns but groups should not—a departure from
the basic premise of political pluralism that people should be
able to organize as groups to participate in public life. Most
likely, however, the whole effort would be pointless: If McCain-Feingold
is passed, money will cut a channel right around it.

Since the election, many editorial pages have called on Congress
to reform campaign finance, as if the majority were likely to
pass a proposal that would give their opponents a better chance
to defeat them. Speaker Gingrich has already said that he thinks
electoral politics is underfunded and that limits on contributions
should be eliminated; last year conservatives were making noises
about eliminating public funds for presidential campaigns. If
conservatives enact a broad campaign finance measure, they may
well use it to take revenge on the AFL-CIO and create a new legal
framework that is even more biased in their own favor.

If there is one proposal that might achieve bipartisan
support and do some good, it's the idea of free or low-cost TV
airtime. Like most people, politicians of both parties might agree
that they deserve lower prices. Campaign finance has become a
bigger problem today in large measure because of the escalating
cost of television advertising. If we could cheapen the cost of
campaigns, we could at least get the problem back to a smaller
scale. Paul Taylor, a former Washington Post reporter,
has formulated a proposal for a "broadcast time bank,"
which would provide candidates and parties with vouchers for airtime,
financed by fees on broadcasters. This is public financing by
other means and extends the one successful precedent we have—public
funding of presidential campaigns.

In Taylor's proposal, however, the fees that finance vouchers
would come from a surcharge on other political advertisements
sold at prevailing rates, raising their cost by 50 percent. Taxing
independent campaigns at that rate would discourage them, which
might seem like a good idea. But it would create a dangerous precedent
for discriminatory taxation of political speech that could be
used to suppress dissenting opinion. Still, the basic concept
of the broadcast time bank is sound.

But the chances of genuine reform passing this Congress are probably
about as great as the proverbial camel passing through the eye
of a needle. The more promising road to change is the difficult
one that Ellen S. Miller described in our last issue ["Clean
Elections, How To
," January-February 1997]: the development
of a grassroots movement in the states, focused on building support
for the so-called Clean Money Option recently adopted by popular
initiative in Maine. Unlike McCain-Feingold, Clean Money calls
for full public financing of election campaigns. Like the existing
system for financing presidential campaigns, it is voluntary for
the candidates but once accepted includes spending limits. And
rather than banning independent expenditures (which would be overturned
by the courts), the Clean Money approach calls for matching public
funds for a candidate whose opponent benefits from an independent
campaign. The great virtue of Clean Money is that it frees candidates
from the demeaning business of raising money, turns their attention
back from contributors to constituents, and sufficiently equalizes
political resources to encourage people without big financial
backers to run for office. The only hope for such a solution is
building from the bottom up.


But there is one further option that reformers need to consider:
limiting congressional terms. Popular support for term limits
reflects the fundamentally correct judgment that incumbents can
too easily consolidate their positions and stifle change—for example,
on campaign finance. Representatives who knew that their future
as incumbents was limited might be more receptive to reforms that
reduced the cost of campaigns and equalized resources.

Seven years ago in these pages ["Can Government Work?"
Summer 1990], I wrote in support of term limits for House members
only, arguing, "When the control of the House at some point
in the future shifts to the Republicans—as it must someday—the
Democrats will find themselves as locked out as the Republicans
are today. Indeed, the Republicans would then add to their fund-raising
edge all the advantages of incumbency that now redound to the
Democrats." I suggested that term limits apply to the House
but not the Senate in line with the Founders' vision of the House
as the branch more responsive to changing public sentiment (although
House-only term limits would indirectly spur greater competition
for the Senate by denying House members the safe option of keeping
their seats).

While proposals for term limits have come mainly from the right,
there is no necessary relation between term limits and partisan
interests. Some Democrats fear that in view of Republican financial
advantages, they would lose a disproportionate number of open
seats, but the main evidence for this concern comes from the South,
where the partisan realignment has nearly run its course. Despite
originally being introduced with conservative support, term limits
this year were the key to Democrats' success in recapturing the
California Assembly and Maine Senate.

In the form they are currently being proposed for Congress—lifetime
limits of 6 or 12 years on service in the House and 12 in the
Senate—term limits would too sharply restrict the accumulation
of legislative experience. We need a middle ground that limits
incumbency but does not preclude the election of experienced legislators.
The answer, I suggest, lies in limiting the number of consecutive
terms in the House while allowing for re-election after a "time
out." A limit of four consecutive terms would significantly
increase the number of open seats in any election year and make
House elections far more competitive. Some former representatives
could retake their seats—and many would, though perhaps only after
beating new incumbents under more equal conditions.

If supporters of term limits want congressional approval, they
will need support from the center and left. (As I write in late
January, term limits are expected to come up for a vote and quick
defeat in Congress.) A more modest, House-only limit on consecutive
terms ought to be the basis of a compromise and acceptable to
those of us who are generally allergic to constitutional amendments.

The system needs shaking up. A broadcast time bank, Clean Money,
and limits on consecutive terms in the House would help revitalize
the democratic ideals we claim to believe in. Such reforms might
enable us to tell our children that ours is indeed a government
of the people without the nagging sense that we are only repeating
a useful fiction in the hope that it will some day come true.

*In reporting preliminary data from the political scientist Martin
Wattenberg, I described his criterion for close races as those
decided by 2 percentage points or less. In fact, Wattenberg classified
as close any race where the winner had 52 percent or less of the
two-party vote. There were 32 of these races, and Republicans
won 23 of them.

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