Commentary

Bigger Government Leads to Bigger Campaign Spending

By Patrick Basham
November 1, 2004

Campaign spending is skyrocketing. According to Larry Noble of the Center for Responsive Politics, the 2004 presidential and congressional campaigns will collectively cost about $3.9 billion, a 30 percent increase over 2000.

Noble attributes that spending to “the increase in giving by individuals to candidates and parties.” But his reasoning confuses the symptom with the disease and reflects the conventional lack of wisdom on campaign spending.

The most important factor driving campaign spending upward isn’t the increase in individual campaign donations permitted by the McCain-Feingold campaign finance reform legislation. Rather, the most important factor is bigger government.

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. As scholarly studies have shown, increasing government activity leads to more efforts to influence political decisions, including increased spending on campaigns. 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 over the past few decades. Collectively, Americans today pay more than two-and-a-half times (in real terms) the amount in federal taxes that they did in 1970. On the expenditure side, federal government spending will reach $2.4 trillion in the 2005 fiscal year, a 950 percent nominal increase in 35 years. Government has assumed the additional power to regulate all kinds of private conduct, especially regarding economic life. The cost of complying with those federal regulations exceeds $700 billion.

The high 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.

So is it any wonder that several billion dollars are spent lobbying politicians during each election cycle? The desire to gain benefits or avoid costs from regulation pushes campaign contributions upward.

There is solid empirical evidence that expanding government results in increases in campaign spending. 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 that occurred over that time.

The recent correlation between government spending and campaign spending is even stronger. The 30 percent increase in campaign spending since 2000 closely corresponds to the 31 percent increase in federal government spending during the past four years.

Is there a solution to increased campaign spending? Within the current policy environment, it is impossible to reduce campaign spending. Our legislators’ demonstrated lack of commitment to limited government ensures that the upward momentum of campaign spending will continue unabated for the foreseeable future.

We will 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 symptom 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. All other efforts to limit campaign spending will be futile.

Patrick Basham is senior fellow in the Center for Representative Democracy at the Cato Institute.