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by: Billy Stokes


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THE REFORM DEBATE Politics and the First Amendment CONTENTS INTRODUCTION Bar e R Orin 95 DOCUMENTS Ronald Dworkin The Curse of American PoliticsquoteN lork Review at Books October 17 1996 pp 19 24 Bradley A Smith Faulty Assumptions and Undemocratic Consequences of Campaign Finance Reform lae aN louma vol 105 January 1996 pp 1049 91 104 Cass R SunsteinquotPolitical Equality and Unintended ConsequencesquotCoumtia Law Review vol 94 May 1994 pp 890 1414 113 THE REFORM DEBATE Politics and the First Amendment INTRODUCTION BY DANIEL R ORTIZ Few recent constitutional decisions have raised as much commentary as Buckleyv VaIea 4Z4 US 1 1976 document 31 and its progeny On the one side reformers attack the Supreme Court for mise understanding both the First Amendment and how money works in politics They read these cases as constitutional mistakes as wrongheaded judicial meddling that magnifies the power ofthe rich On the other side deregulationists celebrate the Court for vindicating the First Amendment against strong public opinion In their eyes the Court has acted bravely to save the American political system from misguided albeit popular reform Many commene tators of course see some wisdom in both posi tions and seek to defend a view in between Ronald Dworkin presents a strong version of the reform argument In his article quotThe Curse of American Politics Dworkin begins by asking whether Buckleywas wrongly decided and ends by calling for the Court to overrule it document 41 Cutting through to the Court s central justification he finds that Buckley stands on an quotindividual choice model ofpolitics By this he means that its overall stance which is deeply suspicious of gov ernment regulation rests ultimately on the view that the First Amendment allows people to hear what ever they want at least in the realm of politics Al though this notion may be attractive especially to people who believe in a bustling free marketplace of ideas Dworkin thinks it fundamentally mise taken To his mind it misunderstands not only free speech but also quotwhat it really means for free people to govern themselves The result is not just legal error but the weakening of democratic politics The mistake Dworkin finds in this view is that it sees equality as necessary to only one part of de mocracy Although the individualechoice model gives each voter one vote and thus makes each an equally powerful judge of competing candidates and positions the model ignores equality among citizens in another important respect It allows some people more power than others as participants in the contest of forming political opinion Wealthy individuals can quotcommand more attention for their own candidates interests and convictions than can others As Dworkin puts it When the Supreme Court said in the Buckley case that fairness to candidates and their convictions is foreign to the First Amendment it denied that such fairness was required by democracy That is a mistake because the most fundamental characterization of democracyithat it provides selfegovernment by the people as a wholeisupposes that citizens are equals not only asjudges but as participants as well According to Dworkin we must have equal power not only to judge among the views pref sentedias the rule of quotone person one vote seeks to guaranteeibut also to command the attention of others to our own views Such equality does not of course require that others find our arguments persuasive but it does demand that each citizen be able to compete on equal terms for every other citizens attention Dworkin believes this type of equality justifies regulating some spending in elections and thus necessitates overruling Buckley But he sees little Chapter 4 The Reform Debate 95 CHAPTER 4 prospect of thatiat least soon In fact as he notes if the Colorado Republican case is any indication Colorado Republican Federal Campaign Commit tee V Federal Election Commission 116 SCt 2309 1996 document 3 4 more justices now seem inclined to extend Buckleythan to overrule it In stead Dworkin argues a more realistic strategy we should simply declare Buckleya mistake even if the Supreme Court will not admit it and do everything we can to avoid its implications He thus advocates reform that pursues this second type of equality to the full extent Buckleypermits and urges us to chale lenge Buckleywhenever we can Bradley A Smith s article quot Faulty Assumptions and Undemocratic Consequences of Campaign Fi nance Reform document 42 takes a quite dif ferent approach to Buckley Although Smith does not address the constitutional question directly he does like Dworkin try to uncover and then ques tion the fundamental assumptions of one side of the debateiin his case the reformers assumptions Unlike Dworkin Smith does not find one overarching normative theory of politics holding together the side he attacks He believes instead that the case for reform rests on many different faulty descriptive theories about how money works in our political system But his discussion no less than Dworkin s holds quite deep implications for both the constitutionality and wisdom of reform Smith begins by laying out four major descripe tive assumptions reformers make about money in politics that too much money is spent that smaller contributions are better than larger ones that money buys elections and that money corrupts politicians All four he argues are wrong or at least unsupported Smith argues against the first by com paring political and product advertising As large as the amounts spent in political advertising may be he points out they are dwarfed by the amounts spent in advertising products When considered per voter moreover the costs look reasonably small Smith challenges the second assumptionithat when it comes to contributions smaller is betteri 96 Chapter 4 The Reform Debate by pointing out that too few Americans actually make contributions to support adequate political debate Moreover those candidates who can gar ner widespread small contributions are usually those who excite the passions of supporters on the extremes ofthe political debate The mainstream appears poorly stocked with small contributors Smith contests the third assumptionithat money buys electionsiby arguing that money may follow success more than success does money And finally he uses empirical arguments to fight the view that money corrupts candidates Money affects few votes in the legislature he claims and quotthe available evi dence simply does not show a meaningful causal relationship between campaign contributions and legislative voting patterns This empirical claim of course has quite farereaching implications for the anticorruption rationale Buckleyupheld Smith does not rest there He goes on to argue that the consequences of reform arejust as bad as its assumptions To his mind the reformers have it exactly backwards Far from shoring up democracy reform undermines it in several particular ways First Smith argues that campaign finance reform entrenches the status quo lt necessarily favors in cumbents by making it harder for challengers to raise money Second he believes that campaign fie nance reform promotes influenceepeddling in the legislature By restricting contributions reform ref stricts people s ability to monitor their representae tives and so keep them from shirking Bad enough by itself decreased monitoring also makes bribery which Smith sees as a substitute for contributions more likely Third Smith argues that campaign finance ref form favors quotselect elites To the extent that reform decreases the power of money to in uence elections it increases the power of elite attributes like name recognition and celebrity status to in uence them This change simply redistributes power from wealthy individuals to select elites without making its overall distribution more equitable In addition Smith contends that campaign finance reform fa vors wealthy candidates Additionalregulation only increases the advantage Buckley gave to such can didates when it struck down restrictions on candie dates contributing to their own campaigns Finally Smith argues that campaign finance reform favors special interest over grasseroots activity Because it requires lawyers and others with specialized knowle edge to navigate through the shoals of legal require ments regulation quotprofessionalizes politics and thus distances it from ordinary citizens To the ex tent Smith s arguments are sound even reformers should worry ln quotPolitical Equality and Unintended Consee quences Cass R Sunstein tries to steer a course between the reform and deregulation extremes document 43 With Buckley s foes he believes that equality should extend beyond the vote itself Dee mocracy demands that equality play a much wider role in politics With Buckley s supporters on the other hand he believes that regulation should be subject to searching review To him quotmoney is speech because it serves to communicate ideas As the title of Sunstein s article suggests moreover he also agrees with Smith that campaign quot C lation can have many unwanted consequences Sunstein criticizes Buckleyand in particular its hostility to equality concerns by placing the case in historicalelegal perspective The Buckleyregime under which Congress cannot restrict individual expenditures should be familiar to us he argues It is a regime of economic laissezefaire just like the regime the Supreme Court enforced during the early part of this century under Lachnerv New York 198 US 45 1905 a case striking down state maximum hour and minimum wage legislation In both cases he explains the Court viewed regue lation as unjust because it disturbed some deeply held baseline of entitlementiof free speech in Buckley and of property in Lachnerithat was thought to be natural and unrelated to society s political decisions Sunstein argues that this feeling although deeply held is wrong The baselines the Court used in both cases are neither natural nor preepolitical Both ref flect the existing distribution of legal entitlements and seem natural only because we are so used to them The familiar in a sense blinds us Further more he argues just as the Supreme Court ultie mately recognized this fact about Lachner and repudiated that case as one of the great mistakes of our constitutional history so too it should repudie ate Buckley They both rest on the same mistaken foundations The second part of Sunstein s piece takes a dif ferent tack and discusses reform s unintended con sequences He agrees with Smith on some details Reform may for example entrench incumbents More importantly he argues that we should anae lyze reforms dynamically When we contemplate a reform we should take into account the different actors likely reactions Often regulated parties will respond in ways that thwart the regulators original intentions or indeed make the situation worse Sunstein argues for example that limiting indi vidual 1 might lead to more numerous and more influential political action committees PACs and that limiting hard money might in crease soft moneyiboth consequences most ref formers would hate If we do not take these dynamic reactions into account when setting policy and in terpreting the First Amendment our own good motives may defeat us These three writers offer a fair sample of the many different positions political and legal commentae tors take in this area The great differences of opine ion spring notjust from different notions of what the Constitution requires but also from different normative and descriptive assumptions about democratic politics The debate is complex and fase cinating and so long as we all have such robust and differing ideas about how democracy should and does function it will remain unresolvable 1 Chapter 4 The Reform Debate 97 Ronald Dworkin The Curse of American Politicsquotew York Review of Books October 17 1996 pp 19 24 Ronald Dworkin one ofthe most prominent champions ofreform argues that Buckleyv Valea docue ment 31 was wrongly decided and should be overturned or barring that simply ignored to the extent possible He finds that it rests on a faulty normative assumption that democracy requires equality only in voting not in helping form the political opinions of others To him we must regulate much campaign spending in order to ensure that we can each equally compete for everyone else s political attention Was the Buckleydecision right7 The Constitution s First Amendment declares that Congress quotshall make no law abridging the freedom ofspeech These abstract words cannot mean that government must pass no law that prevents or punishes any form of speechithat would rule out laws against black mail and fraud Free speech must mean the freedom to speak or publish when denying that freedom would damage some other individual right that free speech protects or when it would impair democi racy itself It is a premise of democracy for example that the people as a whole must have final authority over the government not vice versa That principle is compromised when official censorship limits the character or diversity ofpolitical opinion the public may hear or the range ofinformation it may con sider particularlyithough not exclusivelyiwhen the censorship is designed to protect government from criticism or exposure So the Supreme Court has ruled as in the Pentagon Papers case that gov ernment may not prohibit the publication of material pertinent to judging its own performance It is another premise of democracy that citizens must be able as individuals to participate on equal terms in both formal politics and in the informal cultural life that creates the moral environment of the commu7 nity That principle is compromised when government prohibits speech on the ground that the convici tions or tastes or preferences it expresses are unworthy or degraded or offensive or that they would be dangerous if others were persuaded to embrace them So particularly in recent decades the Court has been zealous in protecting neoiNazis pornographers and flagburners from censorship inspired by such judgments Neither of these two principles of democracy is violated however by a legal restriction on campaign expenditures Expenditure limits do not protect government from criticismiincumbents as we saw benefit more than challengers from unlimited spendingiand they do not presuppose that any political opinion is less worthy or more dangerous than any other Nor would such limits seriously risk keeping Reprinted with permission from The New York Review of Books Copyright 1996 Nyrev Inc 98 Chapter 4 The Reform Debate from the public any argument or information it would otherwise have media advertising of rich candie dates and campaigns is now extremely repetitive and the message would not change if the repetitions were fewer In the Buckley decision however the Court claimed another more general principle of democracy lt declared that since effective speech requires money in the television age any legal limit on how much politicians can spend necessarily diminishes the overall quantity of political speech and violates the First Amendment for that reason The Court conceded that capping expenditures would permit poor candidates to compete more effectively with rich ones But it said quotthe concept that government may restrict the speech ofsome elements ofour society in order to enhance the relative voice ofothers is wholly foreign to the First Amendment What reason might we have for accepting that view7 Two arguments are often made The first supposes in the spirit ofJohn Stuart Mill s famous defense of free speech that a community is more likely to reach wise political decisions the more political argue ment or appeal its citizens are able to hear or read It is certainly true that expenditure caps would limit the quantity of political speech If a rich politician or a wellefinanced campaign is prevented from broadcasting as many television ads as he or it would like then the sum total of political broadcasts is by hypothesis less than it would otherwise be Some citizens would indeed be prevented from hearing a message they might have deemed pertinent But since the curtailed broadcasts would almost certainly have repeated what the candidate had said on other occasions it seems unlikely that the repetition would have improved collective knowledge Nothing in the history of the many democracies that do restrict electoral expense suggests that they have sacrificed wisdom by doing so In any case the argument that curtailing political expenditure would hinder the search for truth and justice seems so speculativeiand the potential cost in those values so meager even if the argument is rightithat it hardly provides a reason for forgoing the conceded gains in fairness that restricting electoral expenses would bring A second familiar argument is very different It insists that the freedom of speech that really is essential to democracyithe freedom to criticize government or to express unpopular opinions for exampleiis best protected from official abuse and evasion by a blanket rule that condemns any and all regulation of political speechiexcept perhaps to avoid immediate and serious violence or a national disaster It is better for a community to forgo even desirable gains than to run the risk of abuse and the censorship ofgenuinely important speech that a less rigid rule would inevitably pose But this argue ment overlooks the fact that in this case what we risk in accepting a rigid rule is not just inconvenience but a serious loss in the quality of the very democracy we supposedly thereby protect It seems perverse to suffer the clear unfairness of allowing rich candidates to drown out poor ones or powerful corpora tions to buy special access to politicians by making enormous gifts in order to prevent speculative and unnamed dangers to democracy that have not actually occurred and that no one has shown are likely to occur We would do better to rely on our officialsiand ultimately on our courtsito draw lines and make distinctions of principle as they do in all other fields of constitutional law But though these two familiar arguments are easily countered the Buckleydecision cited another more profound argumentil shall call it the quotindividualechoice argumentiwhich I believe has been very in uential among those who support the decision even though it is rarely articulated in full quotIn the free society ordained by our Constitution the Court said quotit is not the government but the people individually as citizens and candidates and collectively as associations and political committees who must retain control over the quantity and range of debate on public issues in a political campaign We Chapter 4 The Reform Debate 99 must take some care to appreciate the force of that argument I said that much of First Amendment law is grounded in the ideal of democratic selfegovernmentithat the ultimate governors of a society should be the people as a whole not the officials they have elected That principle does not seem to apply in the case of expenditure limitations lsaid because those limits are designed not to prevent the public from learning any particular kind of information or hearing any particular kind of appeal but on the con trary to enhance the diversity and fairness of the political debate But the individualechoice argument insists that instead of that apparently admirable goal justifying the constraint it explains what is wrong with it because any attempt to determine the character of the political debate by legislation violates an important democratic rightithe right of each individual citizen to make up his own mind about what information or message is pertinent to his decision how to use his vote Should he watch as much of his favorite candidate or party as possible to solidify or rein force convictions he holds intuitively or in order to arm himself for political arguments with other citizens Or should he watch all candidates including those whose personality or views he knows he detests when he would rather do something else Should he take an interest in negative ads that deride an opponent s character Or should he try to follow complex political argument crammed full of statise tics he knows can be manipulated Some people including many who now press for expenditure limits and other reforms have their own clear answer to such questions They endorse a higheminded quotcivic republican ideal ofdemocratic discourse They imagine a nation ofinformed citizens giving equal time and care to all sides ofimpore tant issues and deliberating thoughtfully about the common good rather than their own selfish inter ests But the individualechoice argument insists that those who accept that ideal have no right to impose it on others and are therefore wrong to appeal to it as justification for coercive measures like expendie ture caps that deny people the right to listen to whatever political message they want as often as they want In a genuine democracy it insists the structure character and tone of the public political dis course must be determined by the combined effect ofindividual choices of citizens making political decisions for themselves not by the edicts of selfestyled arbiters of political fairness and rationality If we want to bring American politics closer to civic republican ideals we must do so by example and persuae sion not by the coercive force ofexpenditure caps or other majoritarian rules It might seem natural to object to this argument that in the real world we live in people cannot make their own decisions about which political messages to watch or listen to anyway because those decisions are made for them by rich or wellefinanced candidates whose advertisements dominate programming But that objection is less powerful than it might at first seem There is little evidence that citizens who take an active interest in politics could not discover the statements and positions of any serious candie dateithat is of any candidate who would have any significant chance of winning if every voter knew his views in great detailiif they were willing to make the effort to do so Of course it is true as Senator Bill Bradley said that voters are much more likely to be convinced by advertisements constantly shown during commercial breaks in popular programming than by the less expensive campaigning that poorer candidates can afford If that were nattrue then candidates who spent fortunes on such advertise ing would be wasting their money But it does not decrease the freedom ofa voter to choose for himself which candidate to watch when one candidate is on television constantly and another only rarely pro vided that the voter can find the latter s message if he searches And it would be unacceptably paternalise tic to argue that a voter should not be allowed to watch what he wants to because he is too likely to be convinced by it 100 Chapter 4 The Reform Debate It is also true as I said that many potential candidates decide not to run because they are likely to lose when money dominates politics But we must distinguish between two reasons a poor candidate might have for that decision He might fear that voters would not learn of his existence or policies because he has too little money to spend on publicizing them or he might fear that even ifvoters did learn he would lose anyway because the weight of money and advertisement on the other side would make his good ideas seem terrible ones The appropriate remedy for the first danger according to the individualechoice argument is some form of subsidy for poorer candidatesidirect grants to those whose opponents spend more than a specified limit for example or free television time for poorer candidates on special cable channels cre ated or used for that purpose or in specified network slots paid for from a national fund Nothing in the Supreme Court s decisions would bar such government subsidies And according to the individual choice argument the second dangerithat even candidates subsidized in such a way could not match the advertising power ofthose with enormous resourcesiis not one that a democracy can address through expenditure limits because government would then be denying citizens the broadcasts they wished to watch on the ground that they should not want to watch them or that they are too likely to be persuaded by them Once again these are obviously impermissible grounds for any constraints on speech I emphasize the apparent strength of the individualechoice argument not to support that argument but to make its structure plainer and to suggest that we must confront it at a more basic level by reject ing the conception ofdemocratic selfegovernment on which it is based Citizens play two roles in a def mocracy As voters they are collectively the final referees or judges of political contests But they also participate as individuals in the contests they collectively j udge they are candidates supporters and political activists they lobby and demonstrate for and against government measures and they consult and argue about them with their fellow citizens The individualechoice argument concentrates exclue sively on citizens in the first role and neglects them in the second For when wealth is unfairly distrib uted and money dominates politics then though individual citizens may be equal in their vote and their freedom to hear the candidates they wish to hear they are not equal in their own ability to com mand the attention ofothers for their own candidates interests and convictions When the Supreme Court said in the Buckleycase that fairness to candidates and their convictions is foreign to the First Amendment it denied that such fairness was required by democracy That is a mistake because the most fundamental characterization of democracyithat it provides selfegovernment by the people as a wholeisupposes that citizens are equals not only as judges but as participants as well Of course no political community can make its citizens literally their own governors one by one lam not my own ruler when I must obey a law that was enacted in spite of my fierce opposition But a com munity can supply selfegovernment in a more collective senseiit can encourage its members to see themselves as equal partners in a cooperative political enterprise together governing their own affairs in the way in which the members of a college faculty or a fraternal society for example govern themselves To achieve that sense ofa national partnership in selfegovernment it is not enough for a community to treat citizens only as ifthey were shareholders in a company giving them votes only in periodic elections of officials It must design institutions practices and conventions that allow them to be more engaged in public life and to make a contribution to it even when their views do not prevail Though the ques tion ofwhat that means in practice is a complex one it seems evident that at least two conditions must be met for any community fully to succeed in the ambition Chapter 4 The Reform Debate 10 First each citizen must have a fair and reasonably equal opportunity not only to hear the views of others as these are published or broadcast but to command attention for his own views either as a candidate for office or as a member of a politically active group committed to some program or convice tion No citizen is entitled to demand that others find his opinions persuasive or even worthy of attene tion But each citizen is entitled to compete for that attention and to have a chance at persuasion on fair terms a chance that is now denied almost everyone without great wealth or access to it Second the tone ofpublic discourse must be appropriate to the deliberations of a partnership orjoint venture rather than the selfish negotiations of commercial rivals or military enemies This means that when citizens disagree they must present their arguments to one another with civility attempting rationally to support policies they take to be in the common interest not in manipulative slanted or mendacious pitches designed to win as much ofthe spoils of politics as possible by any means These two require mentsiof participant equality and civilityiare parts of the civic republican ideal I described But we can now defend them not just as features of an attractive society that perceptive statesmen have the right to impose on everyone but as essential conditions offair political engagement and hence ofselfe government for all If we embraced that attractive account of the conditions of selfegovernment we would have to accept that democracyiselfegovernment by the people as a wholeiis always a matter of degree It will never be perfectly fulfilled because it seems incredible that the politics of a pluralistic contemporary society could ever become as egalitarian in access and as deliberative in tone as the standards I just described demand We would then understand democracy not as a pedigree a nation earnsjust by adopting some constitutional structure of free elections but as an ideal toward which any wouldebe democratic society must continually strive We would also have to accept not only that America falls short of important democratic ideals but that in the age of television politics the shortfall has steadily become worse The in uence of wealth unequally distributed is greater and its consequences more profound than at any time in the past and our politics seem daily more rancorous illespirited and divisive So this analysis ofdemocracy as self government confirmsiand helps to explainithe growing sense of despair about American politics that I began this essay by trying to describe How should we respond to that despair We must understand the First Amendment as a challenge not a barrier to improvement We must reject the blanket principle the Supreme Court relied on in Buckley that government should never attempt to regulate the public political discourse in any way in favor of a more discriminating principle that condemns the constraints that do violate genuine principles of democracyithat deny citizens information they need for political judgment or that deny equality of citizenship for people with unpopular beliefs or tastes for examplei but that nevertheless permits us to try to reverse our democracy s decline Is it realistic to hope that the Supreme Court will soon overrule or modify the Buckleydecision7 lfl am right the decision was a mistake unsupported by precedent and contrary to the best understanding of prior First Amendment jurisprudence It is internally flawed as well its fundamental distinction be tween regulating any citizens or groups contributions to someone else s campaign which the Court allowed and regulating the expenditures of individuals or groups on their own behalf which it did not is untenable Justice Clarence Thomas remarked in his concurring opinion in the Colorado Republican document 3 4 case last June that there is no difference in principle between these two forms ofpolitie cal expression Thomas was rightiwhy should Ross Perot be free to spend a great fortune promoting his views in the most effective way he caniby running for president and spending a fortune on televie 102 Chapter 4 The Reform Debate sioniwhile one of his passionate supporters is not free to promote his own views in the most effective way he caniby contributing what he can afford to Perot s campaign In retrospect at least this untenable distinction seems a compromise designed to split the difference allowing Congress to achieve one of its purposesipreventing the corruption that almost inevitably accompanies largeescale contributionsiwhile still insisting on the sanctity of political speech If so the Court s compromise has failed because without a direct limit on spending any system ofregulation of contributions no matter how elaborate will collapse as ours has When politics desperately needs money and money desperately seeks in uence money and politics cannot be kept far apart Therefore the case for overruling Buckleyis a strong one The prospects for doing so are much less strong Justices Ruth Bader Ginsburg and John Paul Stevens made plain in a dissenting opinion by the latter their doubts that the First Amendment really does bar expenditure limits But though Justice Thomas even more openly announced himself ready to revise Buckley he would revise it by forbidding contribution limits as well as expenditure limits not by allowing limits on expenditures and as I said he and three other Justices argued for an even stronger ban on regulating expenditures than Buckley imposed But the American public is becoming increasingly angered by the political role of money Even in 1992 before the new explosion in campaign contributions a poll of registered voters likely to vote showed that 74 percent agreed that quotCongress is largely owned by the special interest groups and that 84 percent endorsed the statement that quotspecial interest money buys the loyalty of candidates Ifthat dissatisfaction continues to grow and the public understands that the Buckleydecision prevents the most direct attack on the problem the pressure for overruling it would intensify If the decision were overruled the way might be opened for a new system of regulation banning for example political come mercials in breaks in ordinary programming as other democracies do and providing free television time out ofpublic funds for longer statements by the candidates themselves In any case even if Buckleyremains we should feel no compunction in declaring the decision a mis take and in attempting to avoid its consequences through any reasonable and effective device we can find or construct The decision did not declare a valuable principle that we should hesitate to circume vent On the contrary it misunderstood not only what free speech really is but what it really means for free people to govern themselves Chapter 4 The Reform Debate 103 Bradley A Smith Faulty Assumptions and Undemocratic Consequences of Campaign Finance Reform ae aN lourna vol 105 January 1996 pp 1049 91 Bradley Smith lays out many different arguments against reform In sum he believes that the assump7 tions behind it are mistaken and the consequences perverse Although he does not address the constitui tional issues directly his argument runs right to the policy matters at the heart of that debate HI FAULTY ASSUMPTIONS OF CAMPAIGN FINANCE REFORMERS Four general assumptions underlie the arguments made in favor of campaign finance regulation First there is too much money being spent in political campaigns second campaigns based on small contri7 butions are in some sense more democratic more in touch with the people than campaigns financed through large contributions third money buys elections presumably in a manner detrimental to the public good and fourth money is a corrupting in uence on the legislature Given these assumptions it is believed that the end result of an unregulated finance system will be a political process increasingly dominated by wealthy individuals whose interests are at odds with those of ordinary citizens But are these assumptions warranted This part ofthe Essay will examine each ofthem in turn and conclude that each one is seriously flawed A Assumption One Too Much Money Is Spent on Campaigns One often hears that too much money is spent on political campaigns The language in which came paigns are described in the general press constantly reinforces that perception Candidates amass war chests with the help of special interests that pour their millions into campaigns Obscene expenditures careen out of control or skyrocket upwards This language notwithstanding there is actually good cause to believe that we do not spend enough on campaigns The assertion that too much money is spent on campaigning essentially begs the question Compared to what Compared to yogurt or potato chips Americans spend more than twice as much money each year on yogurt and two to three times as much on the purchase of potato chips as they do on political Reprinted by permission of The Yale Law Journal Company and Fred B Rothman amp Company from the l aIe Law fouma vol 105 1996 pp 1049791 104 Chapter 4 The Reform Debate campaigns In the twoeyear election cycle culminating in the elections of November 1994 approximately 590 million was spent by all congressional generaleelection candidates combined Although this set a newrecord for spending in congressional races the amount is hardly exorbitant amounting to roughly 3 per eligible voter spent over the twoeyear period between elections Total direct campaign spending for all local state and federal elections including congressional elections over the same period can be reasonably estimated as between 15 billion and 20 billion or somewhere between 750 and 10 per eligible voter over the twoeyear cycle When one considers that this perevoter figure is spread over seve eral candidates for which that voter is eligible to cast a ballot it is hard to suggest that office seekers are spending obscene sums attempting to get their messages through to voters Comparisons to levels ofcorporate spending on product advertising help to illustrate that spending on political campaigns is minimal The sum of the annual advertising budgets of Procter amp Gamble and Philip Morris Company the nation s two largest advertisers is roughly equal to the amount spent by all federal and state political candidates and parties in a twoeyear election cycle The value of such compari sons can be disputed lfone views the problem as the allegedly corrupting effect ofcampaign money then the suggestion that it may take less to buy politicians than to sell soap and tobacco provides little comfort But such numbers are useful to put political spending into perspective when it is the raw levels ofspending that are challenged and to consider the probable effect on political communication of reform measures that would limit spending lncreased campaign spending translates into a bettereinformed electorate GaryJacobson s extensive studies have shown that quotthe extent and content of information voters have has a decisive effect on how they vote Voters understanding of issues increases with the quantity of campaign information received In short spending less on campaigns will result in less public awareness and understanding of issues There are no objective criteria by which to measure whether quottoo much is spent on political came paigns What is spent on campaigns one might fairly suggest is the amount that individuals feel it is worthwhile to contribute and that candidates find it is effective to raise and spend Considering the importance of elections to any democratic society it is hard to believe that direct expenditures of ap proximately 10 per voter for all local state and national campaigns over atwoeyear period constitutes a crisis requiring limitations on spending B Assumption Two Campaigns Fund ed with Small Contributions Are More Democratic Within the reform movement lies a deeperooted belief that democratic political campaigns should be financed by small contributions This position is motivated by the belief that large contributions corrupt either or both the electoral and legislative systems Such a belief suggests that a campaign funded through small contributions will in the end lead to less corruption However small contributions are often seen as an end in themselves on the notion that even if money were not corrupting small contrie butions epitomize the American belief in selfegovernment and participatory democracy This notion of 1 the campaign funded through small cuuui uutiuu as t quot nfrepre enLaL39 dem is unrealistic Chapter 4 The Reform Debate 105 First this vision appears to be based on an idealized image ofdemocratic politics The burden of financing political campaigns has always fallen on a small minority of the American public Today as many as eighteen million Americans make some financial contribution to a political party candidate or PAC in agiven election cycle Yet this quotbroad base ofsupport amounts to only some 10 ofthe votingeage population With the exception of the occasional race with a candidate who can whip up an ideological fervor on the fringe of mainstream politics such as George McGovern or Oliver North Americans are simply unwilling individually to contribute enough money in small amounts to run modern campaigns It is a mistake to assume that a broad base of contributors necessarily makes a campaign in some way more representative or more attuned to the popular will Though the eighteen million who contribute to campaigns constitute a far broader base of financial contributors than existed in the eighteenth and nineteenth centuries few would argue that this has made the political system more democratic or more responsive Indeed it is an article of faith in reformist literature that our system has grown less respone sive to popular will in the last century In fact however those candidates who have been best able to raise campaign dollars in small contributions have often been those who were most emphatically out of the mainstream of their time Barry Goldwater s 1964 presidential campaign for example raised 58 million from 410000 small contributors before going down in a landslide defeat On his way to an even more crushing defeat in 1972 George McGovern raised almost 15 million from small donors at an average of approximately 20 per contributor And if we assume that reliance on numerous small contrie butions makes a campaign in some way more democratic then the most democratic campaign of 1994 was the US Senate campaign of Oliver North North raised approximately 20 million almost entirely from small contributors and actually outspent his nearest rival by nearly 4 to 1 Yet he still lost to an unpopular opponent plagued by personal scandal All ofthese campaigns were among the most prominent extremist candidacies in recent decades This suggests that the ability to raise large sums in small amounts is a sign of fervent backing from arelatively small minority rather than a sign of broad public support At the same time truly massebased political movements have historically relied on a relatively small number of large contributors for quotseed money if not for the bulk of their funding Campaign finance reform efforts tend to overlook the significant collective action problem that pre vents most voters from giving financially to candidates Even if large contributions were totally banned thereby increasing the relative importance of small contributions no single contribution would be likely to have a significant impact on an election Voters therefore still have little rational incentive to make contributions This collective action problem may be overcome by a radical campaign in which donors are motivated by ideology rather than rational utilityemaximizing calculations However in most in stances there will not be sufficient funds available to finance campaigns at a level that informs the elece torate unless a resort is made to public funds Thus a system of private campaign finance will almost inevitably come to rely on large individual donors who believe that their substantial gift can make a difference and on interest groups ie PACs that overcome voter inertia by organizing voters to ad dress particular concerns C Assumption Three Money Buys Elections The third assumption ofcampaign finance reform is that money buys elections in some manner incompatible with a functioning democracy It seems axiomatic that a candidate with little or no money 106 Chapter 4 The Reform Debate to spend is unlikely to win most races Furthermore the candidate who spends more money wins more often than not But correlation is not the same as cause and effect and one must be careful not to make too much ofsuch simple numbers The correlation between spending and victory may stem simply from the desire of donors to contribute to candidates who are likely to win in which case the ability to win attracts money rather than the other way around Similarly higher levels of campaign contributions to and spending by a candidate may merely re ect a level of public support that is later manifested at the polls Generally speaking the same attributes that attract voters to a candidate will attract donations and those that attract donations will attract voters In other words the candidate who is able to raise more money would usually win even ifthat candidate could not spend the added money The ability to raise money is evidence of political prowess and popularity that would normally translate into votes regardless of spending At the same time higher spending does not necessarily translate into electoral triumph One need only look at recent elections to prove this point In the 1994 US House elections for example many 39 wuu quot J 439 g 39 less than their opponents More pointedly the thirtyefour Republican challengers who defeated Democratic incumbents spent on average only twoethirds of the amounts expended by their opponents and one spent less than oneetwentieth as much as did his in cumbent opponent Given the inherent advantages of incumbency this is powerful evidence that a monetary advantage alone does not mean electoral success The assumption that money buys elections is based on simple correlation The candidate who spends the most usually wins However it would be surprising if this were not the case as contributions ow naturally to those candidates who are popular and are perceived as having a good chance of winning It seems clear that many candidates win despite spending less than their opponents and that the correla tion between spending and success is not as strong as other indicators such as the correlation between incumbency and success The problem if it exists is not that some candidates buy elections by spend ing too much but that other candidates spend too little to reach the mass ofvoters D Assumption Four Money Is a Corrupting In uence on Candidates A fundamental tenet of the reform movement is that money has corrupted the legislative process in America Large numbers of Americans have come to view legislative politics as a money game in which campaign contributions are the dominant in uence on policymaking In many respects this would seem to be the most sound of the fundamental reformist assumptions Experience and human nature tell us that legislators like most people are in uenced by money even when it goes into their campaign funds rather than directly into their pockets Many legislators them selves have complained of the in uence ofmoney in the legislature In fact however a substantial majority of those who have studied voting patterns on a systematic basis agree that campaign contributions affect very few votes in the legislature The primary factors determining a legislator s votes these studies conclude are party affiliation ideology and constituent views and needs Where contributions and voting patterns intersect they do so largely because donors contribute to those candidates who are believed to favor their positions not the other way around Chapter 4 The Reform Debate 107 lf campaign contributions have any meaningful effect on legislative voting behavior it is on a limited number of votes generally related to specialized or narrow issues arousing little public interest A legise lator is unlikely to accept a campaign contribution which can be used only to attempt to sway voters in exchange for an unpopular vote which definitely alienates voters Therefore specialized issues provide the best opportunity to trade votes for money On these issues prior contributions may provide the contributor with access to the legislator or legislative staff The contributor may then be able to shape legislation to the extent that such efforts are not incompatible with the dominant legislative motives of ideology party affiliation and agenda and constituent views Whether or not the in uence of campaign contributions on these limited issues is good or bad depends on one s views ofthe resulting legislation The exclusion of knowledgeable contributors from the legislative process can just as easily lead to poor legislation with unintended consequences as can their inclusion In any case it must be stressed that such issues are few The available evidence simply does not show a meaningful causal relationship between campaign contributions and legislative voting patterns While campaign contributions may in uence votes in a few limited cases this would not seem to justify wholesale regulation The pressure for campaign finance regulation has been based on assumptions that are at best quese tionable and at worst seriously flawed Not surprisingly then campaign finance reform efforts enacted into law have had negative consequences for our political system IV THE UNDEMOCRATlC CONSEQUENCES OF CAMPAIGN FlNANCE REGULATION Campaign finance reform has generally focused on three specific tactics for promoting change limiting contributions whether by individuals corporations or PACs limiting campaign spending and ultimately using public funding for campaigns These reform tactics have several negative consequences which can be broadly labeled undemocratic Specifically campaign finance reform efforts entrench the status quo make the electoral system less responsive to popular opinion strengthen the power of select elites favor wealthy individuals and limit opportunities for grassroots political activity This part discusses each of these consequences in turn assuming that any regulation exists within a system of private campaign funding A Campaign 339 D f m F Quo Campaign finance reform measures in particular limits on contributions and overall spending insulate the political system from challenge by outsiders and hinder the ability of challengers to compete on equal terms with those already in power Contribution limits tend to favor incumbents by making it harder for challengers to raise money and thereby make credible runs for office The lower the contribution limit the more difficult it becomes for 108 Chapter 4 The Reform Debate a candidate to raise money quickly from a small number of dedicated supporters The consequent need to raise campaign cash from a large number of small contributors benefits those candidates who have in place a database of past contributors an intact campaign organization and the ability to raise funds on an ongoing basis from PACs This latterg r 39 almn r entirelv ofcurrent 39 Thus contribution limits hit political newcomers especially hard because of the difficulties candidates with low name recognition have in raising substantial sums of money from small contributors Beyond making it harder for challengers to raise cash contribution limits also tend to decrease overall spending which further works against challengers lncumbents begin each campaign with significant advantages in name recognition They are able to attract press coverage because of their office and they often receive assistance from their staffs and send constituents postageefree mailings using their franking privilege Through patronage and constituent favors they can further add to their support One way for challengers to offset these advantages is to spend money to make their names and positions known Those few studies that have attempted to isolate and quantify the effect of campaign spending on votes have found that once a candidate spends the minimal amount needed to penetrate the public cone sciousness additional spending affects a very limited number of votes However the positive effect of added spending is significantly greater for challengers than for incumbents In fact studies show an inverse relationship between high levels of incumbent spending and incumbent success Heavy spending by an incumbent indicates that the incumbent is in electoral trouble and facing a wellefinanced chale lenger Because an incumbent s added spending is likely to have less of an effect on vote totals than the additional spending of a challenger limits on total campaign spending will hurt challengers more than incumbents By lowering overall campaign spending therefore contribution limits further lock into place the advantages of incumbency and disproportionately harm challengers Absolute spending ceilings whether mandatory or voluntary have the potential to exacerbate this problem considerably Set low enough they may make it impossible for challengers to attain the critical threshold at which they can reach enough voters to run a credible race Overall spending caps also pre vent challengers from ever spending more than incumbents While spending more than ones opponent is not necessary to win an election a challenger s ability to outspend an incumbent can help to offset the advantages of incumbency Efforts to limit spending whether mandatory or through incentiveebased voluntary caps should therefore not be viewed as benign or neutral B Campaign Finance Reform Promotes Influence Peddling and Reduces Accountability Limits on contributions increase the incentives for contributors to seek influence rather than the election of likeeminded legislators and reduce the effectiveness of legislativeemonitoring efforts We have previously seen that though the argument is overstated campaign contributions may affect legislative votes on a limited number of issues Many reformers have been more concerned about contributors who adopt a legislative strategy attempting to in uence legislative votes than with donors who adopt an electoral strategy aimed at influencing election outcomes Yet strangely enough contribution limits the most popular reform measure encourage PACs and other monied interests to adopt legislative strategies This results in the representative system being less responsive to public opinion Campaign contributors must weigh the costs and benefits of pursuing an electoral strategy versus a legislative strategy Money given to a losing challenger is not merely money wasted it is money spent Chapter 4 The Reform Debate 109 counterproductively as it will probably increase the enmity of and decrease access to the incumbent With incumbents winning in excess of 90 of House races an electoral strategy of supporting challenge ers has very high risks Even in close races so long as a contributor is limited to a maximum contribue tion of 10000 or some other amount the contributors campaign donation is unlikely to increase significantly the odds of a victory for the challenger The lowerisk alternative is to contribute to incume bents in the hope that a legislative strategy might succeed at least by minimizing otherwise hostile treat ment aimed at the contributors interests Thus because the risk of an electoral strategy is so high contribution limits tend to lock the rational contributor into a legislative strategy To the extent then that campaign contributions in uence legislative voting behavior campaign finance regulation in the form of contribution limits is likely to make the problem worse PACs perform a valuable monitoring function in the current campaign regime a function that would be lost were private funding to be eliminated It has been suggested that the real issue that the campaign reform movement attempts to address is quotshirking or the tendency of elected officials to betray their public trust in favor of their own or other interests In most cases it will not be rational for individuals to devote considerable time to monitoring the performance of elected officials However by banding together with others having similar concerns individuals can perform the monitoring function at a reasonable cost lnterest groups and the PACs they spawn thus play an important role in monitoring officeholders performances so as to prevent shirking Therefore measures that would limit or eliminate the role of PACs are likely to reduce legislative monitoring leading to a legislature ever more isolated from the people Finally there is always the possibility that limiting private contributions will simply increase the value of a more corrupting alternative outright bribery It is naive to think that when the government is heavily involved in virtually every aspect of economic life in the country and quite a few noneconomic spheres as well people affected by government actions will accept whatever comes without some kind of counterstrategy In this way too contribution limits may make the electoral system less responsive to public opinion and therefore less democratic C Campaign Finance Regulation Favors Select Elites Campaign finance reform is usually sold as a populist means to strengthen the power of ordinary citizens against dominant bigemoney interests In fact campaign finance reform has favored select elites and further isolated individuals from the political process There are a great many sources of political in uence These include direct personal attributes such as speaking and writing ability good looks personality time and energy and organizational skills as well as acquired attributes such as wealth celebrity and access to or control of the popular press In any society numerous individuals will rise to the top of their professions to become part ofan elite Both as a prerequisite to their success and as a reward for it such individuals will have certain abilities that they can use for political ends For example Hollywood celebrities by virtue of their fame may gain audiences for their political views that they would not otherwise obtain They may be invited to testify before Congress despite their lack of any particular expertise or they may use their celebrity to assist campaigns through appearances at rallies Similarly successful academics may write powerful articles 110 Chapter 4 The Reform Debate that change the way people think about issues Labor organizers may have at their disposal a vast supply ofhuman resources that they can use to support favored candidates Media editors reporters and an chors can shape not only the manner but also the content of news reporting Those with marketing skills can apply their abilities to raise funds or to produce advertising for a candidate or cause Successful entrepreneurs may amass large sums of money that they can use for political purposes The common response to this argument is that money can buy other sources ofpower It can pure chase labor marketing knowehow media access even speaking coaches and improved physical appear ance Not only does this response notjustify the prejudice against money however but it is simply incorrect insofar as it sees this as a unique feature of money A winning personality the ability to forge political alliances and the time to devote to politics can like money be used to gain access to the media labor and other prerequisites to political success Moreover these skills like the ability to produce move ing television ads or to write effective campaign literature and speeches are themselves convertible into money For example money can be raised through slick direct mail pitches operation of phone banks advertisements speeches at rallies booths at county fairs and countless other means The trick to effece tive electoral politics is to take the assets with which one begins and to use them to obtain additional assets that one lacks Money is no different Once we accept the fact that different individuals control different sources of political power it be comes apparent that attempts to exclude a particular form of powerimoneyifrom politics only strengthen the position of those whose power comes from other nonmonetary sources such as time or media access For example though the Supreme Court has allowed states to limit even independent expenditures by nonmedia corporations in candidate races newspapers magazines and TV and radio corporations can spend unlimited sums to promote the election of favored candidates Thus Donald Graham the publisher of the Washington Post has at his disposal the resources of a media empire to promote his views free from the campaign finance restrictions to which others are subjected ABC News anchor Peter Jennings is given a nightly forum on national television in which to express his views Media elites are not the only group whose in uence is increased by campaign spending and contribue tion limits Restricting the flow of money into campaigns also increases the relative importance of inekind contributions and so favors those who are able to control large blocks of human resources Limiting contributions and expenditures does not particularly democratize the process but merely shifts power from those whose primary contribution is money to those whose primary contribution is time organization or some other resourceifor example from small business groups to large labor unions Others who benefit from campaign finance limitations include political middlemen public relations firms conducting quotvoter education programs lobbyists PACs such as EMTLY s List that bundle large numbers oflOOO contributions and political activists These individuals and groups may or may not be more representative of public opinion than the wealthy philanthropists and industrie alists who financed so many past campaigns D Campaign Finance Limitations Favor Wealthy Candidates Though campaign finance restrictions aim to reduce the role of money in politics they have helped to renew the phenomenon of the quotmillionaire candidate iwith Michael Huffington and Ross Perot as only the most celebrated recent examples In the Buckley document 31 decision the Supreme Court Chapter 4 The Reform Debate 11 held that Congress could not limit the amount that a candidate could spend on his or her own came paign Contribution limits however force candidates to raise funds from the public only in small amounts The ability to spend unlimited amounts coupled with restrictions on raising outside money favors those candidates who can contribute large sums to their own campaigns from personal assets A Michael Huffington Herb Kohl or Jay Rockefeller becomes a particularly viable candidate precisely because personal wealth provides a direct campaign advantage that cannot be offset by a large contribue tor to the opposing candidate These candidates represent an array of views across the political spec trum The point is not that these rich candidates hold uniform views but more simply that a system favoring personal wealth in candidates will restrict the number of viable candidates potentially limiting voter choice While most reformers have criticized Buckley for creating precisely this situation it seems a mistake to exacerbate the problem through added regulation as long as Buckleyremains law At the same time that contribution limits help independently wealthy candidates they may harm workingeclass political interests Historically candidates with large constituencies among the poor and the working class have obtained their campaign funds from a small base of wealthy donors By limiting the ability of wealthy individuals such as Stewart Mott to finance these efforts regulations may harm workingeclass constituencies Supporters of these candidates simply do not have the funds to compete with other constituencies and candidates E Campaign Finance Regulation m mm Artix in Campaign finance regulation is also undemocratic in that it favors welleorganized special interests over grassroots political activity Limitations on contributions and spending by definition require significant regulation ofthe campaign process including ub Lantialiepur Ling J 39 a to quot spent and the sources of funds Typically regulation favors those already familiar with the regulatory machinery and those with the money and sophistication to hire the lawyers accountants and lobbyists needed to comply with complex filing requirements Such regulation will naturally disadvantage newcomers to the political arena especially those who are themselves less educated or less able to pay for professional services Efforts to regulate campaigns in favor of small contributors thus have the perverse effect of professionalizing politics and distancing the system from ordinary citizens Regulation also creates opportunities to gain an advantage over an opponent through use of the regue latory process and litigation has now become quota major campaign tactic Again one can expect such tactics to be used most often by those already familiar with the rules Indeed there is some evidence that campaign enforcement actions are disproportionately directed at challengers who are less likely to have staff familiar with the intricacies of campaign finance regulation Campaign finance regulation has been packaged as a means of returning power to quotordinary people In truth however such regulation acts to exclude ordinary people from the political process in a variety of ways It insulates incumbents from the voting public in both the electoral and legislative spheres it increases the ability of certain elites to dominate the debate by eliminating competing voices it places a renewed premium on personal wealth in political candidates and it hampers grassroots political active ity These problems are not the result of a poorly designed regulatory structure but rather the inevitable result of a regulatory structure built on faulty assumptions 112 Chapter 4 The Reform Debate Cass R Sunstein Political Equality and Unintended Consequences Cmumbia aN Review vol 94 May 1994 pp 1390 1414 Cass Sunstein steers something of a middleicourse between the reform and deregulationist camps On the one hand he argues that Buckley document 31 was wrongly decided To him it repeats the mistake of the Supreme Court s interventions in the economic and social realms early in this century On the other hand he believes reform poses many potential pitfalls like entrenching incumbents In the end he calls for some regulation but asks that it proceed carefully and cautiously It is a familiar point that government regulation that is amply justified in principle may go terribly wrong in practice Minimum wage laws for example appear to reduce employment Stringent regula7 tion of new sources of air pollution may aggravate pollution problems by perpetuating the life of old especially dirty sources Ifgovernment closely monitors the release ofinformation there may be less information Unintended consequences of this kind can make regulation futile or even selfidefeating By futile regulation Imean measures that do not bring about the desired consequences By selfidefeating regulation I mean measures that actually make things worse from the standpoint of their strongest and most publicispirited advocates We do not lack examples of both of these phenomena It is unfortunate but true that current campaign finance laws may well provide more illustrations Some campaign finance regulation is amply justified in principle As we will see there is no good reason to allow disparities in wealth to be translated into disparities in political power A wellifunctioning democracy distinguishes between market processes of purchase and sale on the one hand and political processes of voting and reason igiving on the other Government has a legitimate interest in ensuring not only that political liberties exist as a formal and technical matter but also that those liberties have real value to the people who have them The achievement of political equality is an important constitutional goal Nonetheless many imaginable campaign finance restrictions would be futile or selfidefeating To take a familiar example it is now welliknown that restrictions on individual expendituresidesigned to reduce in uenceipeddlingican help fuel the use of political action committees PACs and thus in crease the phenomenon ofin uenceipeddling This is merely one ofa number of possible illustrations I can venture no exhaustive account here and I attempt to describe possibilities rather than certain ties But one of my principal goals is to outline some ofthe harmful but unintended consequences of campaign finance restrictions This article originally appeared at 94 Colum L Rev 1390 1994 Reprinted by permission Chapter 4 The Reform Debate 113 l CAMP AIGN FINANCE REFORM JUSTIFICATIONS AND THEJUDlClAL RESPONSE A Arguments for Campaign Finance Reform In principle the case for campaign finance regulation is very strong We can identify at least three central grounds for such regulation First and most obvious perhaps is the need to protect the electoral process from both the appearance and the reality of quotquid pro quo exchanges between contributors and candidates Such exchanges occur whenever contributors offer dollars in return for political favors The purchase of votes or of political favors is a form of corruptionia large issue in recent campaigns Corruption is inconsistent with the view that public officials should act on the basis of the merits of proposals and not on the basis oftheir personal economic interest or even the interest in increasing their campaign finances Ofcourse consideration ofthe merits will often involve people s preferences and of course a willingness to pay cash may re ect preferences But the link between particular cash payments and any responsible judgment about the merits is extremely weak Laws should not be purchased and sold quot r t f quidpr j violate this principle The second interest independent of corruption involves political equality This is a timeehonored goal in American constitutional thought People who are able to organize themselves in such a way as to spend large amounts ofcash should not be able to in uence politics more than people who are not similarly able Certainly economic equality is not required in a democracy but it is most troublesome if people with a good deal of money are allowed to translate their wealth into political in uence It is equally troublesome if the electoral process translates poverty into an absence of political in uence Of course economic inequalities cannot be made altogether irrelevant for politics But the link can be die minished between wealth or poverty on the one hand and political in uence on the other The quotone personeone vote rule exemplifies the commitment to political equality Limits on campaign expendie tures are continuous with that rule The third interest is in some ways a generalization of the first two Campaign finance laws might promote the goal of ensuring political deliberation and reasonegiving Politics should not simply register existing preferences and their intensities especially as these are measured by private willingness to pay In the American constitutional tradition politics has an important deliberative function The constitue tional system aspires to a form of quotgovernment by discussion Grants of cash to candidates might come promise that goal by for example encouraging legislatures to vote in accordance with private interest rather than reasons The goals of political equality and political deliberation are related to the project of distinguishing between the appropriate spheres of economic markets and politics In democratic politics a norm of equality is important disparities in wealth ought not lead to disparities in power over government Similarly democracy requires adherence to the norm ofreasonegiving Political outcomes should not be based only on intensities of preferences as these are re ected in the criterion of private willingness to pay Taken together the notions of equality and reason egiving embody a distinctive conception of politi cal respect Markets are operated on the basis of quite different understandings People can purchase things because they want them and they need not offer or even have reasons for their wants Markets embody their own conception ofequality insofar as they entail a principle of quotone dollarione vote but this is not the conception of equality appropriate to the political sphere To distinguish between the market and politics is not to deny that an expenditure of money on behalf 114 Chapter 4 The Reform Debate of a candidate or a cause qualifies as speech for first amendment purposes Such an expenditure might well be intended and received as a contribution to social deliberation Many people give money in order to promote discussion of a position that they favor Indeed we might see the ability to accumulate large sums of money as at least a rough indicator that large numbers of people are intensely interested in a candidate s success If a candidate can accumulate a lot of money it is probable that many people like what she has to say or that even ifthe number ofsupporters is not so great their level of enthusiasm is high indeed In this way we might take the ability to attract a large amount of money to reveal some thing importantiif not decisiveiin a deliberative democracy If and because political dissenters are able to attract funds they might be able to do especially well in the political marketplace This possi bility should hardly be disparaged In this regard it is perhaps insufficiently appreciated that a system without limits on financial contrie butions favors people who can attract money without however simply favoring the rich over the poor In theory at least some poor people may be able to attract a lot of money if their political commitments find broad supportifrom say a lot of relatively poor people or from a smaller but intensely interested number ofrich ones Ofcourse it is hardly unusual for arich candidate to find it impossible to obtain sufficient funds because other people are not at all interested in providing support Many candidates with large personal fortunes have failed for just this reason These points are not decisive in favor of a system of laissezefaire for political expenditures and contri butions The correlation between public enthusiasm and the capacity to attract money is crude There is a large disparity between donations and intensity ofinterest in a candidate Candidate A might for example attract large sums of money from wealthy people but A s supporters may be less interested in her success than Candidate B s poorer supporters are interested in B s success even though B s support ers donate less money Moreover as l have emphasized a democracy is concerned with much more than numbers and intensities of preferences At the very least however an expenditure of money is an important means by which people commue nicate ideas and the First Amendment requires a strong justification for any government regulation of an important means of communication We might therefore think of campaign finance laws as viewpointeneutral and even contenteneutral restrictions on political speech At least if the laws are fair the particular content of the speechithe message that is being urgediis irrelevant to whether the campaign finance restriction attaches The area is especially difficult because while these restrictions can be severe the government can point to strong reasons in their support C Lachner Redistribution and Buckley Let us put these various complexities to one side and return to the basic issue of political equality ln rejecting the claim that controls on financial expenditures could be justified as a means of promoting political equality Buckley seems highly reminiscent of the preiNew Deal period lndeed Buckleymight well be seen as the moderneday analogue of the infamous and discredited case of Lachnerv New York in which the Court invalidated maximum hour laws A principal problem with the preiNew Deal Court was that it treated existing distributions of re sources as if they were prepolitical and just and therefore invalidated democratic efforts at reform In a Chapter 4 The Reform Debate 115 key Lachner era case Adkinsv Children sHaspitaI Z61 US525 5606Z1923 for example the Court invalidated minimum wage legislation In so doing it said To the extent that the sum fixed by the minimum wage statute exceeds the fair value of the services rendered it amounts to a compulsory exaction from the employer for the support of a partially indigent person for whose condition there rests upon him no peculiar responsibility and therefore in effect arbitrarily shifts to his shoulders a burden which if it belongs to anybody belongs to society as a whole The language of compulsory subsidyiof taking from some for the benefit of othersiwas central in the Lachner period Regulatory adjustment of market arrangements was seen as interference with an otherwise lawefree and unobjectionable status quo It was a stateemandated transfer of funds from one group for another and this kind of mandate was constitutionally illegitimate To compress a long and complex story This whole approach became unsustainable in 1937 when the legal culture came to think that existing distributions were a product of law were not sacrosanct and could legitimately be subject to governmental correction Throughout the legal system it was urged that property rights were a function of law rather than nature and ought not to be immunized from legal change Such changes would not be banned in principle but would be evaluated on the basis ofthe particular reasons brought forward on their behalf In President Roosevelt s words We must lay hold of the fact that economic laws are not made by nature They are made by human beings And the Supreme Court overruling Lachner itself offered an uncanny reversal of the Adkinsdictum arguing that the community is not bound to provide what is in effect a subsidy for unconscionable employers In its essential premises Buckleyis quite similar to the pre71937 cases Recall that the Court an nounced that the concept that government may restrict the speech ofsome elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment It added that the First Amendment s protection against governmental abridgement of free expression cannot properly be made to depend on a person s financial ability to engage in public discussion The Buckley Court there fore saw campaign expenditure limits as a kind of taking or compulsory exaction from some for the benefit of others The limits were unconstitutional for this very reason Just as the due process clause once forbade government interference with the outcomes ofthe economic marketplace so too the First Amendment now bans government interference with the political marketplace with the term marketplace understood quite literally In this way Buckleyreplicates Lachner On the view re ected in both Buckleyand Lachner reliance on free markets is government neutrality and government inaction But in the New Deal period it became clear that reliance on markets simply entailed anotheriif in many ways goodiregulatory system made possible and constituted through law We cannot have a system of market ordering without an elaborate body of law For all their benefie cial qualities markets are legitimately subject to democratic restructuringiat least within certain lime itsiif the restructuring promises to deliver sufficient benefits This is a constitutional truism in the postiNew Deal era What is perhaps not sufficiently appreciated but what is equally true is that elece tions based on existing distributions of wealth and entitlements also embody a regulatory system made possible and constituted through law Here as elsewhere law defines property interests it specifies who owns what and who may do what with what is owned The regulatory system that we now have for elections is not obviously neutral orjust On the contrary it seems to be neither insofar as it permits high levels of political in uence to follow from large accumulations of wealth 116 Chapter 4 The Reform Debate Because it involves speech Buckleyis in one sense even more striking than Lachner As I have noted the goal of political equality is timeehonored in the American constitutional tradition as the goal of economic equality is not Efforts to redress economic inequalities or to ensure that they are not turned into political inequalities should not be seen as impermissible redistribution or as the introduction of government regulation into a place where it did not exist before A system of unlimited campaign ex penditures should be seen as aregulatory decision to allow disparities in resources to be turned into disparities in political influence That may be the best decision all things considered but why is it uni constitutional for government to attempt to replace this system with an alternative The Court offered no answer Its analysis was startlingly cavalier Campaign finance laws should be evaluated not through axioms but pragmatically in terms of their consequences for the system of free expression II THE PROBLEM OF UNlNTENDED CONSEQUENCES In principle then there are good arguments for campaign finance restrictions Insofar as Buckleyrejects political equality as a legitimate constitutional goal it should be overruled Indeed the decision prob ably ranks among the strongest candidates for overruling of the posteWorld War II period But there are real limits on how much we can learn from abstract principles alone Many of the key questions are insistently ones of policy and fact Was the system at issue in Buckleywelledesigned How might it be improved What will be the realeworld consequences of different plans Will they fulfill their intended purposes Will they be selfedefeating Might they impair democratic processes under the guise of promoting them My goal here is to offer a brief catalogue of ways in which campaign finance legislation may prove unhelpful or counterproductive My particular interest lies in the possibility that campaign finance legislation may have perverse or unintended consequences The catalogue bears directly on a number of proposals now receiving attention in Congress and in the executive branch Of course it would be neces sary to look at the details in order to make a final assessment I am describing possibilities not certain ties and a good deal ofempirical work would be necessary to come to terms with any ofthem A general point runs throughout the discussion Although I have criticized what the Court said in Buckley considerable judicial suspicion of campaign finance limits is justified by a simple point Cone gressional support for such limits is especially likely to re ect congressional selfedealing Any system of campaign finance limits raises the special spectre of governmental efforts to promote the interests of existing legislators Indeed it is hard to imagine other kinds of legislation posing similarly severe risks In these circumstances we might try to avoid rigid command and control regulation which poses special dangers and move instead toward more exible incentiveebased strategies A Unintended Consequences in Particular 1 Campaign Finance Limits May Entrench Incumbents Operating under the rubric of democratic equality campaign finance measures may make it hard for challengers to overcome the effects of incumbency The problem is all the more severe in a period in which it is extremely difficult for chale lengers to unseat incumbents Chapter 4 The Reform Debate 117 The risk of incumbent selfedealing becomes even more troublesome in light of the fact that dissidents or challengers may be able t 4 C of39 only by aiua iug enormous sums of money either from their own pockets or from numerous or wealthy supporters Consider in this regard the candidacy of Ross Perot The Perot campaign raises many questions but it is at least notable that large sums of money proved an indispensable mechanism for enabling an out sider to challenge the mainstream candidates One lesson seems clear Campaign finance limits threaten to eliminate one ofthe few means by which incumbents can be seriously challenged There is particular reason to fear selfedealing in some of the proposals now attracting considerable enthusiasm in Congress For example incumbent senators tend to have less difficulty in raising money than do members of the House ofRepresentatives Members of the House are therefore more dependent on PAC contributions It should be unsurprising that while Senate bills propose a complete ban on multicandidate PACs the leading House bill proposes a much less draconian contribution limit of 2500 per candidate More generally the current proposals do nothing to decrease the benefits ofine cumbency and they may well increase those benefits Whether campaign finance limits in general do entrench incumbents is an empirical question There is some evidence to the contrary Usually the largest amounts are spent by incumbents themselves usue ally incumbents have an advantage in accumulating enormous sums often from people who think that they have something to gain from a financial relationship with an officeholder In these circumstances one of the particular problems for challengers is that they face special financial barriers by virtue of the ability of incumbents to raise large sums of money Probably the fairest generalization is that campaign finance limits in general do not entrench incumbents but that there are important individual cases in which such limits prevent challengers from mounting serious efforts In any case any campaign finance reforms should be designed so as to promote more electoral competition 2 Limits on lndividual Contributions Will Produce More and More In uential PACs The early regulation of individual contributions had an important unintended consequence It led directly to the rise of the political action committee When individuals were banned from contributing to campaigns there was tremendous pressure to provide a mechanism for aggregating individual contributions The modern PAC is the result The posteBuckIeyrise of PACs has a general implication lf individual contributions are controlled while PACs face little or no effective regulation there could be a large shift of resources in the direction of PACs Ofcourse a combination ofPAC limits and individual contribution limits could counteract this problem But limits of this kind create difficulties of their own 3 Limits on quotHard Money Encourage a Shift to quotSoft Money In the 1980s the tightening ofindie vidual contribution limitsi hard money ihelped increase the amount of quotsoft money consisting of gifts to political parties It should not be surprising to see that in recent years there has been an enore mous increase in fund raising by political parties which dispense contributions to various candidates In 1980 the two parties raised and spent about 19 million in 1984 the amount rose to 196 million in 1988 it increased to 45 million In some ways the shift from hard to soft money has been a salutary development It is more difficult for soft money contributors to target particular beneficiaries and perhaps this reduces the risk of the quidpm qua donation Reasonable people could believe that soft money poses lower risks to the intege 118 Chapter 4 The Reform Debate rity of the political process while also exemplifying a legitimate form of freedom of speech and associa tion But the substitution ifit occurs means that any contribution limits are easily evaded Candidates know moreover the identity of the large contributors to the party and for this reason soft money can produce risks of corruption as well 4 Limits on PACs Lead to an Increase in lndividual Expenditures In the next few years Congress may well impose limits on PACs or even eliminate them altogether If it does so there will be pressure for more in the way of both individual contributions and individual expenditures Limits or bans on PAC expenditures will increase the forms of financial help that Congress original efforts in 1971 were specifically designed to limit It is ironic but true that new legislation designed to counteract PACs will spur the very activity against which Congress initially sought to guard For reasons suggested above this development even if ironic may improve things overall There is a good argument that PAC contributions are especially harmful to democratic processes because they are particularly likely to be given with the specific purpose of in uencing lawmakers It is also the case that candidates who receive individual contributions are often unaware of the particular reason for the money whereas PAC beneficiaries know exactly what reasons underlie any donation For all these rea sons a shift from PACs to individual expenditures may be desirable On the other hand PACs have some distinctive benefits as well They provide a method by which individuals may band together in order to exercise political influence Sometimes they offer a helpful aggregative mechanism of the kind that is plausibly salutary in a democracy A shift from PACs to indie vidual expenditures may be unfortunate insofar as it diminishes the power of politically concerned people to organize and pool their resources on behalfoftheir favored causes On balance individual expenditures do seem preferable to PACs because the most severe threats to the quotquidpm qua and public deliberation come from PAC money Restrictions on PACs that move people in the direction of individual expenditures and contributions are therefore desirable My point is only that there is a tradeoff between the two 5 Limits on PACs Can Hurt Organized Labor and Minority Candidates Sometimes minority candie dates can succeed only with the help of PACs specifically organized for their particular benefit For this reason PAC limits will in some circumstances diminish the power ofminority candidates The Congrese sional Black Caucus has expressed concerns over campaign finance regulation on this ground Similar results are possible for PACs organized to benefit women PAC restrictions may also hurt organized labor Currently labor PACs spend most of their money on individual candidates especially incumbent Democrats By contrast corporate PACs contribute about equally to Democrats and Republicans and give substantial sums to the parties rather than to individual candidates A ban on PACs may therefore diminish the in uence of labor unions without materially affecting corporate PACs Perhaps these effects are good or justified on balance But many people who favor campaign finance regulation might be disturbed to see this effect 6 Limits on PACs May Increase Secret Gifts Many current interest groups appear unconcerned about PAC limits even though their interests would appear to be jeopardized by the proposed limits Perhaps it will be easy for them to evade any such limits especially by offering quotsoft money and also by asseme bling large amounts as a result of contributions from unidentifiable sources We lack detailed evidence Chapter 4 The Reform Debate 119 on this issue but there is reason to think that the concern is legitimate It is possible that limits on PACs will make it harder to identify sources of money without materially decreasing special interest funding The current proposals do not respond to this risk 7 Limits on Both PACs and Contributions Could Hinder Campaign Activity Most of the discussion thus far has been based on the assumption that campaign finance reform proposals would limit either PACs or individual contributions In either case limitations on one could lead to increased spending through the other A third option might be to limit both PACs and individual contributions But this option could quite possibly lead to a number of negative effects If the limits were successful campaign activity might be sharply limited as a whole Any such limit would raise First Amendment problems and perhaps compromise democratic government Alternatively resources could be funneled into campaigns through quotsoft money secret gifts or other loopholes in the reforms 120 Chapter 4 The Reform Debate


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