The Presidential System and Campaign Reform


Mr. Chairman, distinguished members of the committee:

My name is Roger Pilon. I am vice president for legal affairs atthe Cato Institute and director of Cato’s Center for ConstitutionalStudies.

I want to thank you Mr. Chairman for inviting me to testifybefore the committee on “The Presidential System and CampaignReform.” In this lull between the decisive presidential primariesand the general election, there is much talk, of course, aboutcampaign finance “reform” in general, especially in light of theattention Senator McCain and the media gave the subject during theprimary season. And more specifically, just last week before thiscommittee Mr. Alan B. Morrison, speaking on behalf of PublicCitizen, offered a proposal that others too have made, namely, toexpand the current presidential election fund and tax check‐​offsystem to cover national parties and, by implication, congressionalelections.

On previous occasions I have shared my thoughts withcongressional committees on the constitutionality of various reformproposals. Today I’d like to make a few more general observationsabout the reform movement, then turn, with that as context, to themore specific issues before the committee.

“Reform” in General

In a March 10 Report to Congress entitled “The PresidentialElection Campaign Fund and Tax Checkoff: Background and CurrentIssues,” the Congressional Research Service surveyed the presentuncertain state of the program‐​for the first time there is ashortfall in funds and there are pro‐​rated payments‐​and then beganits evaluation of the system with the following observation:

Underlying most evaluations are sharply opposing viewsof public funding, a schism little changed from the start.Supporters see it as a democratic, egalitarian system, offering thebest chance to reduce corrosive effects of money on the politicalprocess and renew public confidence in it. Opponents see it as awaste of tax money, which artificially skews the results and forcestaxpayers to fund candidates whom they oppose.

Then on March 18, as if in echo of that observation, theNational Journal ran a lengthy article on campaign financereform entitled “Forever Unclean,” which noted, not entirelytongue‐​in‐​cheek:

A campaign financing system that has evolved fromrestraint to recklessness since the post‐​Watergate reforms aquarter‐​century ago has, at last, achieved a certain state ofperfection: Everyone feels put upon.”

I have made no secret of my own views about theconstitutionality of the present system. Despite the SupremeCourt’s having struck down many of the 1974 amendments to theFederal Election Campaign Act of 1971 — and having sincerepeatedly checked the many efforts of the Federal ElectionCommission to expand its jurisdiction — I believe that the Courtdid not go far enough in 1976 in its seminal Buckley v.Valeo decision. In particular, the argument for allowingrestrictions on contributions has always struck me — and some onthe Court, I might add — as thin. In a truly free society, peopleshould be able to give whatever they want to whomever they choose– including candidates for public office. If “corruption” issuspected, then the burden should be on those who suspect it toprove it.

The implication of our present system, however, seems to be thatonce a contribution exceeds a given threshold — in this case,$1,000 — the presumption of innocence disappears. Or is it,rather, slightly different: that above that figure a presumption ofcorruption arises — the idea being that $1,000 is enough tocorrupt a member of, or candidate for, Congress? Who on thiscommittee would be bought so cheaply? What then is the rightfigure? Anyone?

My point, plainly, is that our present arrangements rest on abed of sand. The Court has said that campaign contributions andexpenditures are protected speech under the First Amendment andthat, accordingly, they can be restricted only for compellingreasons and only by means narrowly tailored to serve those ends.And the prevention of corruption or its appearance is the only suchreason the Court has recognized. But the means the Court sanctionedare hardly tailored to that end, much less narrowly so. Indeed,last fall, when Senator McCain raised the specter of corruption bymoney, he was challenged by several of his colleagues to producethe evidence — at which point he backed off.

And so what we have is the allegation of corruption in general,not corruption in particular. And that, of course, is the easiestallegation in the world to make, because no one in particular ishurt and everyone in general is happy to be caught up in the grandmoral crusade against “corruption” — even if no one can quite puthis finger on the real thing.

But if we cannot locate precisely the corruption that soanimates and drives us, we can surely sow the seeds of “corruption”– or something that looks like it — which is exactly what we havedone. Once the Court gave its blessing to restrictions oncontributions, it soon became clear, as inflation reduced the valueof the limit and the costs of campaigning continued to rise, thatcandidates, parties, and anyone else interested in having a say inthe outcome of elections would have to find some way “around” thelimit. Thus, the very effort to find a way to do what we shouldnever have been denied the right to do is now branded “corruption.“And in a perverse way, the pattern we see in so many other areas ofgovernment intervention in the free affairs of men repeats itselfhere: one intervention only begets calls for another interventionto “correct” the problems created by the previous intervention,ad infinitum, until at last we find ourselves suffocatingunder a surfeit of interventions that no one any longer begins tocomprehend. More than one student of our maze of campaign financelaws has made that observation. Yet calls for still more “reforms“continue unabated.

And it is not simply the complexity or the dubiousconstitutionality of the maze that troubles. It is also the moralimplications. For every “reform” is put forward in the name of“reform” — with all the moral approbation that accompanies thatidea, and the opprobrium that attaches to its opponents. Who, afterall, could be against “reform”? The very idea connotes something tobe reformed, some corruption in the system that needs to be rootedout. Those calling for reform thus occupy the moral high ground,while those on the other side are deemed benighted — or worse. Itis a morality play with white hats and black foreordained.

“Reform” in Particular

With that very brief overview as background, let me say firstthat, quite apart from its other problems, the PresidentialElection Campaign Fund (the Fund) suffers first, and mostimportantly, from the moral presumptuousness just noted. And wehave seen that in the primary season now concluding. Once the Fundwas established, that is, it set “the standard.” Thereafter, anyonewho declined to participate was automatically — and oftenunthinkingly — felt to be somehow “suspect.” The murmur — “Whycan’t you be like the rest of us (or them)?” — could be heard fromother candidates and media alike. “Why can’t you abide by the samerules as everyone else?” George W. Bush was not the first candidateto feel the moral “sting” of those sentiments, of course. Butunlike those few others who have forgone the Fund and itsquasi‐​public money, he is the only one to have advanced beyond theprimaries.

At an elemental level, then, the very presence of the Fund“taints” those who choose, for whatever reason, not to participate.And it does so because this whole campaign finance reformjuggernaut is infused with and animated by the ideas ofegalitarianism. It is thought, first, that private money, whichwill never be equal among candidates, somehow “corrupts” theprocess — again, without any convincing, particularized evidenceon the matter. And then it is thought that whatever money isallowed — whether private, from respect for the Constitution, orpublic, as with the Fund — must in some way be equalized, as ithas been between major party candidates in the general election.The metaphor of a “level playing field” is ever present in thedebate, as if we were talking about some sporting event.

But elections are not sporting events. They are contests betweencandidates for offices established by the Constitution. Candidates,almost of necessity, reflect different interests and differentlevels of support, including financial support — the support ofthose willing to underwrite their campaigns for office. No lawaimed at creating a “level playing field” will ever change that. Itwill only compel those who feel disadvantaged by the egalitarianeffort the law undertakes to look for ways around it. Thus, again,the effort to import an egalitarianism that is utterly out of placein the election context only begets the “corruption” of the schemethat was designed to prevent the “unfairness” of unequally fundedcandidacies.

But if the egalitarian impetus for public funding is misplaced,that leaves the “corruption” of private money as the main argumentfor such funding. Set aside the point that no one has steppedforward to declare his own corruption — to say nothing of hiscolleague’s — we all know that money does buy, at least,influence, whether or not that influence leads to quid‐​pro‐​quocorruption. But influence was around long before the “reforms” of1974; it is still around; and it will continue to be around as longas politicians have the power to redistribute and regulate as theydo today. Campaign finance “reforms” have done nothing to checkthat influence. To the contrary, they have only furtherinstitutionalized it. For the natural antidote against those whowould use their public trust contrary to their oaths of office is avigorous political campaign to unseat such officials. Yet that,precisely, is what modern “reforms” have made more difficult — ifnot near impossible, judging from House races — by restrictingindividual and PAC contributions to artificially low levels.

Exhibits A and B are the presidential candidacy of SenatorEugene McCarthy in 1968, against the establishment presidency ofLyndon Johnson, and the senatorial candidacy of James Buckley in1970, against two virtually identical establishment candidates.Under present restrictions, neither of those candidacies could havegotten off the ground. Absent those restrictions, they were funded,over a fairly short period of time, by substantial contributionsfrom relatively few people. Were the cadidates “corrupted” by thosecontributions — contributions that today are thought to beanathema? Hardly. In fact, the corruption, were it to havehappened, would have been to artificially limit thosecontributions, a measure that would likely have preserved thestatus quo. Yet that, precisely, is what we have today. Make nomistake: campaign finance “reform” is incumbency protection. Thecorrelations are as compelling as the explanations for them: Whatserious citizen would mount a challenge under today’srestrictions?

But the morally troubling implications of public funding do notstop with the matters already noted. There is the furtherdifficulty that arises from putting a candidate to a choice betweenforgoing public funds — to which he is at some level entitled –and forgoing his right to accept funds to any limit — which hewould otherwise be entitled to do. We venture thus into the thicketof these “public funds.” At one level, of course, the funds are“voluntarily” designated by taxpayers through the check‐​offprovision. But that amounts simply to putting the taxpayer to achoice between contributing to the Fund or contributing to theTreasury what he would otherwise owe in taxes. Because the Fundthus draws down the Treasury it is, in that sense, public money. Atthat point, the public, through the Congress, puts the candidate toa choice between money that, in some fraction, is his too, and hisright to accept private funds beyond the limits set by the rulesthat establish the Fund. The situation is not exactly akin to themugger’s proposition — “Your money or your life; you choose.” –but it has that air about it. Put it this way: In his testimonylast week, Mr. Morrison blithely remarked that Congress could,consistent with Supreme Court rulings, add further conditions tothose already in place regarding receipt of public funds. But howextensive could those conditions be before they becomeunconstitutional? This is a vexing area of the law. Once we startdown that road, there is no principled place to stop. The bettercounsel is to think before going down the road.

Lest it be thought that, in the grand scheme of things, we aretalking about relatively trivial amounts of money here, let meremind the committee that one of the great complaints aboutcampaign finance is the “obscene” amount spent on campaigns. Well,let’s look at that. It is estimated that about $200 million will bespent in this cycle on House races. Based on a federal budget forFY2000 of nearly $1.8 trillion, it will take Congress 59 minutes toappropriate what we will spend on House races during the entirecycle. In other words, the federal government spends more in anhour than the nation spends in two years trying to decide whocontrols that spending. Now, which of those spending totals domembers of Congress think is too high?

Let me note finally that apart from the several infirmities Ihave already noted that afflict both the public funding scheme andthe more general system of restraints within which that schemerests, there are other problems with the Fund, not least of whichis the fact that it now seems to be in financial trouble. The CRSreports that taxpayer participation rates have fallen “from a highof 28.7% on 1980 returns to 12.5% on 1997 returns” and that ashortfall in payments to primary campaigns has occurred for thefirst time in the history of the Fund. In its February 29 report,the Federal Election Commission also notes that there are“insufficient funds” to reimburse the amounts the FEC has certifiedfor each of the 1999/2000 primary candidates. Needless to say, thetrends readily apparent in the history of the Fund do not bode wellfor expanding the reach of public funding.

Roger Pilon

Committee on Rules and Administration
United States Senate