Campaign Finance Reform

This article originally appeared in The Washington Post on September 8, 2003.

The U.S. Supreme Court is set to hear four hours of oral arguments Monday on the constitutionality of the McCain-Feingold campaign finance reform bill. What is the likelihood the reforms will be struck down? Where do the justices stand? What impact could the ruling have on the 2004 elections?

John Samples, director of the Center for Representative Government at The Cato Institute, will be online to discuss the campaign finance reform Supreme Court hearing.

A transcript follows.

Editor’s Note: moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

Indiananpolis, Ind.: Aren’t the judges rulings on McCain-Feingold easy to determine (for the most part) because the justices have a particular interpretation of the law based on their party affiliation? After all judges are politicians — they just wear robes.

They run for elective office. They collect political contributions. When they get appointed to the bench, they are appointed by people who expect them to interpret the law in the context of their party’s ideology.

I believe this applies to Supreme Court Justices also. They go before Senate for hearings and claim to have no political views or claim their views don’t effect how they interpret the law. But they wouldn’t be appointed if that were true. They’re appointed to carry a particular interpretation of the law.

John Samples: Political scientists have found some evidence that the Supreme Court follows public opinion with a time lag of about six years. However, partisanship is a more complicated issue at the Court. Many experts believe four current justices want to uphold McCain-Feingold. Two of them were appointed by Republican presidents (Ford and the first Bush). Yet 83 percent of the House Republicans voted against McCain-Feingold. Partisanship on campaign finance regulation is much clearer in Congress than at the Court.

Charlevoix, Mich.: What parts of McCain-Feingold are most likely to be struck down by the Supreme Court? What parts are safe?

John Samples: McCain-Feingold bans “soft money” fundraising by the parties and restricts the funding of election advertising a month or two before an election. Until recently most observers thought the soft money ban would survive and the ad restrictions would fall. Then a lower court struck down part of the soft money ban and upheld part of the ad regulations. So it’s up in the air at the Court. It is safe to say in reality the soft money ban is dead on arrival. I really find it difficult to believe the Court would let Congress regulate advertising critical of members of Congress during elections. The law also funded a study of public financing in the states. That part is safe. The rest is up in the air.

Southern Maryland: Do you favor eliminating all private campaign donations and adopting the British system of public financing?

John Samples: My colleague Patrick Basham, who grew up in England and studied political science at Cambridge, is working on a paper examining public financing in England. He has found limits on private spending make it hard to enter the electoral marketplace. In general, money is clearly necessary to engage in political and electoral activity. Someone who says we should eliminate private donations is really saying we should make political and electoral activity - speech and association - dependent on the will of the rulers, not the ruled. That’s a bad idea on its face.

Demarest, N.J.: I don’t understand the Supreme Court’s opinion that (as people on the right like to phrase it) “money is speech.” No one can dispute that, say, Rupert Murdoch or Richard Mellon Scaife have far more money than average Americans do — so much so that they could, without any sacrifice, make contributions and pay for advertising that a roomful of the rest of us couldn’t afford by draining our 401(k)s. So if money is speech, some people have far more right to speech than others. How does the Court square this with the idea that we are all equal citizens with an equal voice and an equal vote?

John Samples: In Buckley v. Valeo, the Supreme Court did not say “money is speech” or something similar. People say that to obscure the issue and to suggest constitutional protections for campaign spending are absurd. After all, a dollar is not speech; it’s a dollar. Here’s what the Court did say about spending in Buckley:

“A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached. This is because virtually every means of communicating ideas in today’s mass society requires the expenditure of money.”

In other words, because money is so necessary to speak out in today’s world, regulations of campaign spending can restrict freedom of speech (and other constitutional rights). If the government put a limit on how much The Washington Post spent on newsprint, it would limit their freedom of the press.

Buckely also said the Constitution did not permit reducing inequality of influence by restricting speech. The Constitution does not create a right to equal influence over public policy. That’s a good thing for several reasons, not least it would be unenforceable.

Even if you limited money in the name of equality, you would not create equality of influence. You would increase the power of people who have talents at writing, speaking, or political organizing.

Finally, remember not all rich people are conservatives. George Soros just gave the Democrats $10 million. Surveys show 25 percent of the richest 5 percent of Americans are self-described liberals (another 25 percent are moderates). In contrast, 15 percent of the poor are liberals.

Shelby, Ohio: Considering that the C.A.T.O. Institute depends on the funding of neo-conservatives and radical Libertarians like the Mellon and Scaife foundations for their existence. Then taking into consideration their enormous fund raising activities for neo-conservative election campaigns and in fact your paycheck are you willing to discuss this topic honestly or are you going to predictably going to blindly parrot your benefactor’s ideology?

Just what do you think the intent of McCain-Finegold was? What is your opinion the neo-con.’s attack on election reform, (the overwhelming majority of citizens and congressional members support it.) Just why do they continue this habit of dragging Ken Starr out to sue that same majority of American citizens to the benefit of a few handful of neo-con special interest groups?

John Samples: Actually I plan to predictably and blindly parrot my benefactor’s ideology.

More seriously, your question does suggest a common myth about campaign finance debates. Those who support more regulation of campaign finance often assume conservative and libertarian groups spend a lot of money and resources on stopping laws like McCain-Feingold. That’s a pleasant thought perhaps but it’s not true. Groups like Common Cause and the foundations that fund them have spent about $70 million in recent years to get McCain-Feingold passed. Those who oppose it haven’t spent much at all at the think tanks and perhaps about the same as the supporters of the law in litigation. Also keep in mind that liberals like Floyd Abrams and the ACLU argued against McCain-Feingold today at the Court.

I and many of my colleages here at Cato have big policy differences with neo-conservatives so I must say the following: Cato is not a neo-conservative organization. In fact, leading neo-conservatives like William Kriston supported both John McCain and his campaign finance law just a few years ago.

College Park, Md.: The September hearing is largely unprecedented. What does it mean that the judges were willing to hear the arguments at all? Can we expect a quick verdict as well? Thank you.

John Samples: I think we have a quick hearing and will have a quick decision because whatever they decide they hope to avoid introducing chaos into the 2004 election. That makes sense, but I worry about them moving too quickly. Buckley was decided fairly quickly and it was not a model of jurisprudential acumen.

Ashland, Missouri: Given Buckley v. Valeo and Nixon v. Shrink Missouri Government PAC, can’t government ban contributions of any type but not regulate expenditures? The Nixon case, in particular, suggests contributions could be wholly banned. Wouldn’t this just mean that there could be no coordination with the candidate by contributors and elections would revert to individuals and groups, with their own money, encouraging the electorate to vote for candidate X? Party contributions would be banned because they are a backdoor way to contribute as explained in a recent case from Colorado.

John Samples: It’s hard to imagine that Congress would completely ban contributions. That would mean either public financing of congressional elections (which members of Congress and the public do not like) or as you say, allowing quasi-party groups to control campaigns. The money has to come from somewhere. Moreover, remember most campaign money comes from individuals in relatively small sums ($300 or so). Banning contributions would deprive them of that form of political participation. On the constitutional issue, the Court has said contributions may be regulated narrowly to prevent corruption and the appearance of corruption. Getting rid of contributions would hardly be a narrow infringement on the right to give.

Berkeley, Calif.: Dr. Samples,

Robert Merton often wrote of the unintended consequences of social policy. McCain-Feingold is very ambitious and seems to have a lot of up front consequences on politics in America. What are some of the worst case scenarios you can see occur in our electoral system, should the Supreme Court let McCain-Feingold stand as it is?

John Samples: The worst case scenario I can imagine is that McCain-Feingold does what it is supposed to do. Its aim is to restrain people who were raising soft money and buying advertising to attack incumbents. If the soft money ban holds up and the ads are limited as in the law, incumbents will be safer and people will not see advertising that says mean things about members of Congress. We will have less electoral competition and probably less turnout. Having said this, I don’t think the soft money ban will be effective even if it passes constitutional muster.

Washington, D.C.: How do the justices think this decision will rank in terms of importance? Is this rare September session and the extensive hearing (four hours compared to the usual one hour) indicators that they think this is going to be one of their biggest chapters in history, or maybe just the closing chapter to the Renquist years?

John Samples: I don’t know what the justices are thinking. If I were on the Court, I would be worried about making a mess with the decision. The lower court made such a mess and created such uncertainty that they had to suspend their decision.

This decision could be important if the Court overturned Buckley v. Valeo, either by deciding Congress could restrict spending or by invalidating all legislative limits on spending and contributions. That would be big news. Few experts expect such an outcome because the Court has been closely divided on these issues.

Washington, D.C.: What’s the likelihood that the Presidential matching funds provision of campaign regulation will become obsolete in years ahead because it offers no real benefit to the recipients?

How does the court bridge between allowing the federal government to increase the voice of a candidate for president while it also says that government has no duty or effective ability to regulate the quantity of speech in other instances?

John Samples: The Presidential system is slowly collapsing for two reasons. First, public support has declined over the years. In the late 1970s, 28 percent of Americans check off the income tax form to give to the fund. Now about 10 percent do. On current trends, 5 percent will check off the fund in 2008. That has led to continual problems with solvency. The real problem though is the presidential fund lacks democratic legitimacy. As for politics, Howard Dean says he might skip public funding to better compete with President Bush. I suspect the presidential system in the future will only fund sure losers and cranks. It may not die, but it will not be alive.

It is odd that Congress voted public financing for the other branch of government and not for itself. Given the large partisan majorities in Congress in 1974 when the system was created, I think they aimed a equalizing spending by the presidential candidates in the general election. It was an attempt by the Democratic majority of 1974 to gain partisan advantage (which is not to say the other party would not have done the same if they had had a majority then).

Maryland: If you want the ability to contribute to campaigns on the level of Rupurt Murdoch, I suggest you figure out how to make a lot of money. I am incensed over the pettiness of people who think being rich somehow equates to some sort of criminal action.

John Samples: The rich make a good target for politicians, especially when they own media. But if you believe the conservative rich people run the country, consider this: about 63 donors gave over $1 million in soft money to the parties in the 2001-2 campaign. If you add all those contributions together, two-thirds of that sum went to the Democrats. Overall, the parties split the soft money contributions 50-50.

Cape Cod, Mass.: Will the decision have any effect in limiting the loop holes for 2004 election?

John Samples: If you consider soft money fundraising a loophole, we have some evidence that whatever the Court does, it will not prohibit soft money fundraising and spending. The parties have and will set up allied organizations that can raise soft money within the law. A Democratic organization, Americans Coming Together, already exists with multi-million dollars support from many wealthy individuals and organizations. The Supreme Court cannot chose to ban soft money. Their only real choice is whether soft money will be raised by the parties or by these allied organizations.

Arlington, Va.: Are there any parts of the McCain-Feingold bill that you hope the Supreme Court will uphold?

John Samples: No. McCain-Feingold is a somewhat hapless assault on civil society and the freedom to engage in politics. Why save any of it?

Miami, Fla.: Mr Samples, I think you would agree that attempting to rein in our political system with complicated limits on money and behavior would not lead to the greater public good. So what would lead to a greater public good? I would like to (hear some thoughts/see a serious study) on how repealing the Constitution’s 17th amendment (the direct election of Senators) would affect today’s modern political system.

John Samples: Repealing the 17th Amendment might well give the states a strong hand to play as states in their struggles with the national government. The twentieth century was a century of centralization of political power. Maybe the coming century should return to a more decentralized system.

Somewhere, USA: In an ideal world, how would you deal with political fundraising?

John Samples: I would address this question in a different way. Our government was not set up to attain a collective good like say, an ideal electoral system. It was set up to protect individual rights and liberties. Unfortunately, as Jefferson said, “The natural progress of things is for liberty to yield and for government to gain ground.” In elections, the problem we face is getting rid of decades of restrictions and regulations on political activity. If we did that, we would still have to decide the tough question of whether to have disclosure of contributions. I am inclined to think we would have about the same level of disclosure whether government mandates it or not.

Washington, D.C.: When you cite data that shows how very large contributions are made to both major parties, you show that at a certain level of wealth, it becomes profitable to give to both sides. What sorts of issues never become “mainstream” because those whose interests are threatened by them already own all the mechanisms for public debate?

John Samples: Actually, very large contributions in 2001-2 tended to go to one party or the other, not to both sides. 53 percent of all six-figure soft money donations went exclusively to one party or the other. Another 20 percent or so were divided 90-10 between the parties. Only 11 percent of all big money contributions were split between the parties.

I think many people who support campaign finance restrictions think the United States would be a lot further to the left politically, more European, if money were more controlled. But we’re not Europe. We’re America, and the big French/German state is really alien to our culture.

Silver Spring, Md.: Is there any hope that, after the crash, people will ever come to see government interference with and manipulation of markets as the problem, rather than the “inadequacies” of capitalism? In other words, is there any hope for the Libertarian point of view?

John Samples: Keep in mind that a more liberty-oriented view has gained ground over the past few decades. If you remember the 1970s, you will remember that a Republican president said we are all Keynesians while instituting wage and price controls. Now that statement and that policy seems absurd to most people across the political spectrum. It may be an act of faith to say that the freedom of the individual is the idea driving history forward, but I really think that the commonsensical notion that no one had a right to own or control others will become apparent to more and more people over time. And I do believe that war, the great expander of the state, will become less and less frequent.

Washington, D.C.: Disclosure is more beneficial than contribution limits. Limits can’t be enforced effectively and money always seeps in through different channels. Disclosure doesn’t block the flow of money into politics, but allows excessive influence to become an topic of election debate.

John Samples: Quite so. And disclosure has become easier, less costly, and faster. Howard Dean has shown us the beginning of the Internet revolution on the contribution side. The disclosure side will become more apparent over time. Here’s what troubles me about disclosure. Recently I went on the Internet and by entering my zipcode was able quickly to find the contributions made by my neighbors. That information could be abused plus I just think people have a right to give what they want in politics to whom they want and in the end, it’s really none of my business.

Marion, Ind.: BCRA will make it tough for third-parties and grassroots efforts to meet its requirements, partly because of it’s new and partly because it establishes unreasonable burdens.

Third parties may have a tough time managing conventions if they select both state and federal candidates at the same convention because of BCRA’s demands that federal and state money not mingle. Get-out-the-vote efforts, because they have the potential to influence federal races in even-numbered years, could get particularly messy.

Let’s say that there’s a state referendum on the ballot. And let’s say that both sides are spending money to make sure their side wins. Would the planners need to use different bank accounts and separately paid employees to man the campaign itself and the GOTV efforts?

John Samples: FEC Commissioner Bradley Smith points out in his book Unfree Speech (Princeton University Press, 2001) that campaign finance regulations make it harder for newcomers to enter the political game, in part because they have to learn all the rules and in part because of the uncertainty. It’s hard to believe that was not one purpose of BCRA. Historically, such rules would have changed American history. Sen. Eugene McCarthy, whose 1968 campaign led to LBJ’s withdrawal, has said he could never have made his race under the campaign finance regulations adopted in 1974. McCarthy ran with the support of several large contributions given by wealthy individuals troubled by LBJ’s Vietnam policy. We need more competition and more money in elections not more regulations and less money.

Manhattan, N.Y.: Some critics of the law currently being challenged have said it will sharpen the debate and increase the level of partisanship in political information disseminated to the public. Other critics have said it will dullen the debate by permitting less speech with ideological content masquerading as constructive debate about the issues. Either way an important concern seems to be the quality of information available to voters during the election cycle. Will voters be better informed or worse informed about candidates and issues as a result of this law?

John Samples: Cato has just published an important study by Professor John Coleman of the University of Wisconsin. He looked at the effects of spending on what voters know and how they feel about government. (You can get a free copy of the study at Coleman found that more spending means voters are better informed and that the greatest gains in information go to those who knew less prior to the spending. He also found that spending led to citizens having more accurate views about the ideology and positions of candidates (spending improved the quality of the information available to most people). In other words, spending helps democratic values. BCRA aims at reducing spending. If it succeeds, our democracy will be worse off.

John Samples: That seems to be it. Thanks much for the questions. Please feel free to visit our website and download any our studies of campaign finance or other topics. If you haven’t had a look at libertarianism, give us a try.
John Samples is the director of the Center for Representative Government at the Cato Institute.