“Hard Money” Reform Protects Incumbents

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The Senate’s approval of campaign finance “reform” makes a bad situationworse. In particular, it makes it harder for newcomers to run for officebecause it strengthens the advantages incumbents enjoy. This is clear inthe “reform” that raises the amount of money that individuals may give tocandidates.

Under current law, a person may give up to $1,000 to a candidate. This is“hard money.” The candidate may use it directly for his own campaign.(“Soft money” may be used to advocate issues or a political party--but notfor thecandidate directly--and “soft money” amounts are not restricted.) TheSenate’s campaign finance “reform” would raise the limit on “hard money”from$1,000 to $2,000.

The major media and the Senate are saying this is a good thing. That’swhat they want you to believe because they’ve rigged this fix in theirfavor.But, one may ask, doesn’t the McCain-Feingold bill double the contributionlimit? And won’t the higher limit result in a torrent of serious moneyflooding into the political system?

Not in real terms--no. And there’s the catch. If adjusted for inflation,the $1,000 contribution limit enacted back in 1974 would be worth around$3,000 today. So, while no rational observer should object to making a badlaw alittle better, viewed in relative terms the modest increase won’t addressthe fundamental problem of a largely uncompetitive political system. Themost recent evidence is discomforting: November’s congressional electionsaw 392 of 399 House incumbents--98 percent--re-elected.

The factors contributing to this Soviet-style success rate among incumbentpoliticians include the usual suspects: millions of free mailings toconstituents; large staffs both in Washington, D.C., and in districtoffices; free travel; free constituent service; and, most recently, freeWeb sites for campaigning--sorry, communicating--with the electorate.

In addition to being paid for by taxpayers, these vote-enhancinginstruments share a common origin: all were self-bestowed benefits broughtinto effectby incumbent politicians seeking to reinforce their politicalinvulnerability. Critically, limits on contributions to candidates weresimilarly designed (and are protected) to ensure the same outcome: anunlevel campaign-playing field.

The best political science scholarship confirms what politicians recognizeat first glance--it’s difficult for a challenger to oust an incumbentwithout the former spending at least as much as, and probably more than,the latter during the campaign period.

Only by spending large sums on television advertising, direct mailsolicitations, and grassroots organization can a challenger develop thelevels of name recognition, issue identification, and voter mobilizationto catch up with the years (frequently decades) of subsidized campaigningandpork barrel spending that so characterize an incumbent’s terms in office.

Under the rhetorical guise of warding off unspecified corruption, anincumbent is happy to limit himself to $1,000 or even $2,000contributions. Certainly, he may detest the phone calls he has to make andthefundraising breakfasts, lunches, and dinners he has to attend. But at nighthe sleepswell in the knowledge that his challenger back home must do the same(more, if the challenger is serious about winning) without, in most cases, acomparable network of contacts, donors, and lobbyists whose longstandingcollective investment in the incumbent’s career ensures their continuingfinancial commitment.

However, the Senate did overcome its fear of corruption long enough toraise the hard money limit up to $6,000 if a self-financed millionairecandidateis challenging the incumbent. It seems that the political advantagesconferred by private wealth must be corrected for with new rules forthreatened incumbents but the political advantages conferred by publicsubsidy apparently merit no such correcting mechanism.

With almost three decades of empirical evidence to reflect upon, it isclear that contribution limits have two insidious consequences. First, theygreatly reduce the likelihood that a challenger will successfully oust anincumbent, thereby reducing the level of competition necessary for ahealthy political system.

And, second, such long odds against success provide an enormousdisincentive for qualified, successful people to put themselves forward ascandidatesin the first place, thereby reducing the quality of the pool of potentialchallengers and would-be successors should--by scandal, death, orresignation--an incumbent fail to gain or seek reelection.

The loudest of the cheers echoing around the nation’s capital followingthe passage of campaign finance reform belong to incumbent politicians.Challengers nationwide are silent, accepting their electoral fate, as areprospective challengers deciding not to run for office. Actual andprospective challengers won’t start cheering until Congress does away withcontribution limits completely.

Patrick Basham

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