On Tax-Financing of Campaigns: Why We're Skeptical

Published on August 11, 2008

File Under: "Clean" Elections, Taxpayer Financing

Bob Bauer has offered some thoughtful comments on a recent CCP release that found that so-called “clean elections” programs of tax funding for campaigns neither alleviate concerns about “special interest” influence nor lead to voters having greater confidence in government – arguments commonly advanced in favor or tax funding of campaigns.  These findings come on the heels of an earlier CCP reports that found that so-called “clean elections” plans have not, in Maine or Arizona, dramatically altered the make up of the legislature; reduced the number of lobbyists; increased competition; helped government get spending and taxation under control (in fact, “clean elections” in Maine and Arizona has been accompanied by an increase in the rate of government growth in spending and taxes); or led to better government.

 

Given his status as one of both the nation’s leading practitioners and thinkers in the field, as an astute critic of the excesses of the regulatory state, and as one of the leading Progressives to express concern about the effect of the current regulatory regime on grassroots political activity, Bauer’s thoughts always deserve respect and, in this case, some further comment.

 

Bauer does not seem to entirely agree with CCP on the meaning of our recent findings, but he does not disparage them.  In fact, he agrees that , “some reasons [in favor of public financing of campaigns], repeated over the years, have little going for them.”  However, he goes on to suggest, as he has in the past, that government financing of campaigns is justified for another reason that is not addressed by CCP’s studies.  Government subsidies for campaigns are needed, argues Bauer, because the amount of money needed to campaign effectively in modern society simply cannot be raised privately at an acceptable cost.  Candidates simply have to spend too much time raising funds, and that interferes with both campaigning and governance.  This is not a new argument, but it is one that is usually raised in passing, if at all, in debates on tax financing of campaigns.   As Bauer puts it, “the public is better off if candidates have a choice between expending time and energy on finding as much money as they can, and making do with what a public funding system will pay out and just campaigning.”  He continues, “ [t]he ever increasing costs of campaigns is perfectly good reason to provide that choice, so long it is a true and voluntary choice and the system is structured to be viable, funded well and realistically enough to support a campaign.” 

 

Mr. Bauer has not explicitly sketched out (at least so far as we know) how he thinks a government financed system should look, but it he appears to be arguing for an approach sometimes known in academic circles as “floors without ceilings.”  Under this approach, the government would provide candidates (at least “major” candidates) with subsidies, but do little more to regulate the system.  It is a position long advocated by the American Civil Liberties Union. 

 

Bauer is correct that the CCP’s efforts do not address all plausible reasons in favor of tax financed campaigns.  Moreover, most of the studies conducted by CCP have debunked popular arguments made for tax financing, without arguing that government financing is inherently a bad thing.  That is, it may be that tax financing won’t improve public confidence in government; won’t eliminate (or reduce much, or perhaps even reduce at all) “special interest” influence; won’t improve the caliber of candidates; won’t help get taxes and spending under control; won’t reduce the number of lobbyists.  But perhaps there is no harm in trying.  And the “floors without ceilings” approach alleviates many First Amendment concerns – if not accompanied by other limits, citizens are still free to associate and speak out on political matters without interference from the state.

 

With that in mind, it is worth adding a bit as to why, in Bauer’s words, “[CCP] does not have much to say in favor of publicly funded programs,” beyond the fact that most arguments routinely given in favor of tax financing seem to be meritless.

First, we simply sympathize with what is undoubtedly a very large percentage of Americans who do not believe that they should be taxes to support the speech of people with whom they disagree.  Thomas Jefferson famously said, “To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.”  Jefferson was speaking of compelled support for religion, but the sentiment certainly applies to political views as well.  Of course, the issue is not that simple: to some extent taxpayers regularly subsidize speech with which they disagree, as when congressmen or presidents make speeches, when government agencies send out press releases advocating government programs or defending policy choices, or when government grants are made for the arts or other programs.   Still, we think that there Is a plain difference between support of speech which is directly related to the work of government, even if that work sometimes has campaign overtones, and to handing money to politicians and parties specifically to campaign.  And we note that federal grants to the arts, for example, remain one of the most culturally divisive and politicized functions of government.  We question whether it is wise to extend such policies given that there are Americans willing to fund campaigns on a voluntary basis. 

A second issue is the money involved.  $2 to 3 billion a year should provide a well funded system with very generous grants to candidates and parties.  In the great scheme of the mammoth, $3 trillion federal budget, this amount is barely even a rounding error.    Nevertheless, it is real money.  $3 billion a year would be thirty $100 million highway projects around the country, every single year.  It would $2 or 3 billion spent on repairing levees or bridges, every year.  It would fund the Federal Election Commission for about 50 years, or the National Endowment for the Arts for about 20 years.  We’re not convinced – especially given the alternatives, discussed below – that this is a cost effective use of government resources.   

Third, we are not convinced that it is a good thing to make candidates reliant on the state, rather than the citizenry, for campaign financing.  We believe that in a healthy democracy, candidates and parties must be independent of the state.  Of course, if the system is truly voluntary, candidates will be able to choose voluntary financing instead of government subsidies for their campaigns – but if the system is truly “well funded,” such that there is little or no advantage to relying on voluntary, private financing, then few candidates would be expected to do so.   Putting the government in the business of funding political campaigns goes to the heart, soul, and structure of the American Republic.  Former Senate Majority Leader Howard Baker noted when the presidential system was passed in 1974 that, “there is something politically incestuous about government financing… the day to day procedures by which the Government is selected.”  And we agree with former Supreme Court Chief Justice Warren Burger, who wrote in his dissent in Buckley v. Valeo, “the inappropriateness of subsidizing, from general revenues, the actual political dialogue of the people -- the process which begets the Government itself -- is as basic to our national tradition as the separation of church and state also deriving from the First Amendment, or the separation of civilian and military authority, neither of which is explicit in the Constitution but both of which have developed through case-by-case adjudication of express provisions of the Constitution.”  (citations omitted).   Or as humorist P.J. O’Rourke puts it, “you want to get elected to change the government and the only place you can go to get the money necessary to run for election is the government you want to change. Do you see something a little East German about that?" 

Bauer seeks to avoid this by making the system “truly voluntary,” and that is a major point – unlike O’Rourke’s fears, the government will not be the “only” place to go.  But again, the idea of a well-financed system is that it would not pay not to take the government subsidy.  We don’t want our politicians dependent on government to run campaigns - we want them dependent on the citizenry. 

One reason why government financing of campaigns is so problematic is that it provides too many opportunities for mischief.  In other words, once government is playing a major role in financing campaigns, it will have the ability to change the rules in order to benefit particular parties, or certain types of candidates.  These might be incumbents, a concern Justice Scalia has raised with frequency, but it will as often be candidates that have particular skills or that campaign in particular ways.   Officeholders can predict the likely effects of campaign finance laws.  They are not also accurate, to be sure, but they often are.  We believe it is best to minimize government meddling in campaigns.  Few things to more to increase government meddling than to have the government playing a major role in financing campaigns. 

Finally, we are skeptical of the “floors without ceilings” approach for reasons of practical politics.  The fact is, no jurisdiction in the United States has been willing to enact “floors without ceilings.”  Rather, government subsidies are invariably accompanied by numerous restrictions on private giving and spending, and often include schemes, such as “rescue funds,” intended to make sure that privately financed candidates will operate at a disadvantage to candidates who accept the government subsidy.  Of course, past is not future – it is at least theoretically possible to enact a “floors without ceilings” approach.  But that brings up another reality.  As we’ve noted, the things most voters want from campaign finance are unlikely to be realized by changes in campaign finance.   After the government is funding elections, voters will continue to see episodes of corruption; they will continue to see some interests with more influence than others, and frequently to perceive themselves on the losing side; they will still be dissatisfied with the tone and length of campaigns.   The inevitable result of these disappointments will be calls for more regulation.  In other words, we suspect that even if “floors without ceilings” were enacted, it would legitimize government interference in the marketplace of ideas, and would lead to more pressure to restrict First Amendment rights of speech and association.   

Having laid out some reasons why tax financing of campaigns is generally a bad idea, let us close by noting that we do not necessarily agree with Bauer that the only solution to the money chase is government subsidy.  It is beyond dispute that our current regulatory regime both increases the cost of fundraising and the costs of campaigning.  Fundraising in small amounts does indeed take time, and since McCain-Feingold parties are unable to help their candidates with soft-money financed issue ads.  The rules require campaigns to spend thousands of dollars on legal, accounting, and consulting fees.  In other words, Mr. Bauer’s supposition – that the demands of raising money are so great that subsidies are necessary -  is, we think, unwarranted.  Deregulating the campaign finance system would both lower costs and make fundraising less time consuming.  This is they way to go, rather than hitting up the taxpayers for a few billion dollars a cycle.