Commentary

Big Government and Billion Dollar Campaigns

By Patrick Basham
May 24, 2004

The news that this year will see the first billion-dollar presidential election campaign may produce new campaign finance regulation to cure our addiction to political money. Such a reaction confuses the symptom with the disease and reflects the conventional lack of wisdom on campaign spending.

Higher campaign spending isn’t a morality play filled with people wearing white and black hats. Spending on campaigns has risen for observable reasons. Increases in campaign spending should be seen in the light of seven “mores”: inflation has made everything more costly; more elections are held now; more wealth is available for politics; more voters take part; more advertising must be bought; and more campaign finance regulations must be honored.

Nevertheless, the most important factor driving campaign finance upward is “more government.” Simply stated, the growth of government spending fosters the growth in campaign spending. Taxes and regulations on society have increased the ambit of government at all levels. Increasing government activity leads to more efforts to influence political decisions, including spending on campaigns, a relationship confirmed by scholarly studies.

As government does and spends more, individuals try to influence government, both to advance their causes and to protect themselves from abuse. Government has grown enormously. In 2000, the federal government taxed Americans to the tune of $2.03 trillion, a 250 percent real increase since 1970. On the expenditure side, federal government spending reached $1.79 trillion in 2000, a 915 percent nominal increase over the previous 30 years.

Government has assumed the additional power to regulate all kinds of private conduct, especially regarding economic life. Economist Thomas Hopkins estimates that the cost of complying with these federal regulations exceeds $700 billion. The desire to gain benefits or avoid costs from regulation also pushes campaign contributions upward.

These levels of taxation and regulation indicate that government has vast power over many aspects of American life — from wealth redistribution, to the nature of housing, agriculture, education, and health care, to trade, energy, and telecommunications, to gun ownership, to the consumption of alcohol, tobacco, and drugs. Almost 70,000 government bodies are authorized to impose taxes on Americans.

Is it any wonder, then, that several billion dollars are spent lobbying politicians during each election cycle? Is it a surprise that a Brigham Young University study found interest group spending on 2000’s most competitive congressional races totaled more than $360 million?

There’s solid empirical evidence that expanding government results in increases in campaign spending. For example, research by economist John Lott Jr. found that 87 percent of the rise in federal campaign spending between 1976 and 1994 was attributable to the $1,101 per capita rise (in real terms) in federal government spending.

Is there a solution to increased campaign spending? Within the current policy environment, it’s impossible to reduce campaign spending. We’ll only reduce the amount of money flowing within the tributaries of our political system by reducing the incentive for private interests to directly and indirectly support candidates and parties.

Therefore, the only plausible solution is to limit the size of government. Anything else merely treats the symptoms without addressing the underlying disease of the body politic. Lower government spending will lead to lower levels of campaign contributions; in turn, that will result in lower levels of campaign spending.

Efforts to limit campaign spending will be futile. Our legislators’ demonstrated lack of commitment to limited government ensures that the upward momentum of campaign spending will continue unabated for the foreseeable future.