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Money, Politics, and Democracy

Ellen S. Miller

The new Administration has finally set up shop in Washington, and a new Congress, too, is settling down to business. But last year's historic outpouring of public disdain for politics as usual continues to reverberate inside the Beltway. That has pushed proposals to change the role of money in our political system to the top of the legislative agenda.

Or has it?

To be sure there is lots of talk about campaign finance reform. We heard it from President Clinton in his inaugural address. The issue, we are told, is "good government." The aim of reform is to "clean up Washington," to rid our politics of the appearance and reality of corruption. But the impact of money on politics is not principally a matter of corroding clean government. It is, more fundamentally, about the disenfranchisement of millions of Americans, about the inability of our government to set sound national priorities or solve pressing national problems, about public officials who represent big donors and are unaccountable to their constituents. The issue, in a word, is democracy. With each election and legislative cycle, the impact of privately funded elections becomes more clear: the current system of campaign finance undermines the electoral process, tilting elections toward incumbents, awarding undue influence over policy making to the highest bidders, and threatening the basic principles of representative democracy itself.

In fact, the first hurdle that serious reform efforts need to get over is the idea that campaign finance reform is a "good government" issue. Framing the debate in this way encourages narrowly-drawn, partial solutions. Such solutions may hold out the promise of limiting campaign spending, tamping down the amounts of special interest P.A.C. money, and offering some minimal public money as a source of clean campaign funds. But they do not measure up to the scope of the problem or address the inherently distorting conflicts of interest and disenfranchising inequalities ingredient in the private financing of public elections.

First Principles

To clear this first hurdle, we need to begin by reframing the problem of campaign finance. The real issue, as I said, is democracy: more precisely, the conflict between democracy and a system of private financing of elections, and the intensification of that conflict as campaign costs have skyrocketed and as the inequities of our economic system have penetrated more deeply into our politics.

Two basic principles of democratic government are jeopardized by the current system of campaign finance. First, a political democracy requires free and fair elections. For elections to be free and fair, voters must vote; they must face real choices among ideas and competition among candidates; and they must have easy access to information and to arenas where they can participate in open discussion and debate.

We do not have such elections. The overwhelming majority of electoral contests are not won on their merits, but by those who raised the most money, by those whose privately funded speech drowns out the speech of others. Highly qualified and public spirited individuals who would make superb public officials choose not to run because of the extraordinary price of admission to the electoral arena; this limits the people's choices to the few who can finance their own campaigns or appeal to organized special interest funders. Because candidates are required to raise -- or to have -- large amounts of money to wage competitive campaigns, today's money-and-politics system discriminates against people who are not wealthy, discouraging them from participating either as candidates or as voters. Candidates of color, statistically poorer than the public at large, have particularly small chances of electoral success because they do not have access to the money it takes to run a credible race.

Fewer congressional challengers can raise sufficient sums of money to oppose incumbents. Despite intense voter outrage in 1992, incumbents raised the most money, spent the most money, and won 88% of their races. In 83% of House races, challengers were in financially uncompetitive races. And of the 435 winners in House elections, all but 46 outspent their opponents. According to a 1990 Public Citizen analysis, in House races where challengers of color opposed white incumbents, the average incumbent raised $618,871 while the average challenger raised $79,142, mostly from individual contributions. While the average challenger was outspent 3.5 to one in 1990 House races, the average challenger of color was outspent by nearly eight to one.

But democracy requires more than free and fair elections. It also requires genuine equality. The moral foundation of democracy is the idea that citizens are equals. So in a democracy, the preferences of all citizens must be accorded equal value -- the principle of one person-one vote must prevail.

The way we fund elections today mocks this basic principle. It establishes a system of unequal representation and unfair influence on our elected representatives. Simply put, private money in elections has fractured our democracy, dividing citizens into two classes: those who have the resources to make large contributions to campaigns and those who don't. Dependent on private money for their campaigns, elected officials naturally are more responsive to the interests of the class of large contributors than to the interests of the voters generally. The voices of those who cannot or do not give are muted by the vested campaign contributors.

The ideal of democracy, then, is a political system with free and fair elections in which all citizens -- whatever their social and economic circumstances or points-of-view -- have an equal opportunity to participate in and influence the electoral and governing process. Our current scheme of electoral finance does not respect these basic principles. So it is no wonder that citizen confidence in our political system has plummeted.

A New Age?

But now we are told to be more hopeful: political gridlock is being broken by a Democrat in the White House anxious to work closely with a Democratically controlled Congress. I am not so optimistic. The problems this nation faces are in large measure a result of a political system incapable of movement and mired in the status quo. Nothing in President Clinton's election, his campaign promises, or his pronouncements on campaign finance reform will do very much to fix this system.

If President Clinton is serious about "change," he needs to start with a thorough and radical change in the way we fund our elections. Without such change, we can forget about any real opportunity to shift this nation's priorities, set new directions, or restore any balance between rich and poor. For President Clinton to work successfully with Congress on a whole range of policy issues -- from health care and tax reform to restructuring the banking industry -- he has to take the lawyers and lobbyists, health care professionals, and securities firms who funded his campaign and send them back to Wall Street and K Street.

Yet when I look at the funders of Bill Clinton's campaign, I see industries and interest groups determined only to protect their own economic privileges. Business interests contributed more than $40 million to the Clinton campaign and -- in soft money -- to the Democratic party. Of the millions given by corporate America, lawyers and lobbyists contributed the largest amount -- $4.9 million. This class of major donors represents every special interest in the country. Clinton and the Party received huge contributions from agriculture, defense, communication, and health interests. The finance, insurance, and real estate industries alone gave $6.8 million. We should be haunted by the specter of Huey Long. The old political master gathered the acolytes of business around him at the start of a campaign and said: "Those of you who come in with me now will get big pieces of the pie. Those of you who wait until later will get smaller pieces of pie. Those of you who delay too long will get -- Good Government." How can we help but wonder to whom President Clinton or others around him promised big pieces of the pie?

The problem of money in politics goes well beyond the "publicly financed" presidential system. Preliminary figures for the 1992 election show that total campaign spending for House and Senate general election candidates rose to $678 million, a 52% increase over the previous election cycle. In Senate contests, candidates spent $271 million while reserving $12 million for their next race. Most of us think that P.A.C.s are the predominant special interest donors. But in fact P.A.C.s contributed only $52 million of this total; individual contributors gave $163 million. (The remainder came from other sources like candidate loans and candidate contributions.) The cost of 1992 House general election races rose 27% to $314 million. Of this, individuals contributed $151 million; P.A.C.s contributed $117 million. (Again, the remainder came from such sources as candidate loans and candidate contributions.) A record-breaking 52 House candidates each spent more than $1 million on their campaigns (up from 14 in 1990).

A Model Campaign Finance Law

Things have gotten out of hand. That much seems clear. But criticism is easy, and it is much less clear what a constructive solution might be. So what should a serious -- not superficial, not piecemeal -- reform look like?.

It should be a system of, in a phrase, "democratically financed elections" -- a system that would virtually eliminate all private financial contributions, from both individuals and P.A.C.s. (This proposal has been developed into an actual legislative model by the Working Group on Electoral Democracy, a group of grassroots organizers and researchers with offices in Deerfield, Massachusetts and Chicago.) With democratically financed elections, all qualified candidates would receive total public financing during the primary and general election periods for all their election expenses.

The scheme is rooted in the two basic principles of democracy: free and fair elections and political equality. To have free and fair elections, and to establish equality of participation, we need a system of campaign finance in which money -- or access to it -- is no longer the determinant of success. Both incumbents and challengers must have enough money to run effective campaigns, and an equal amount of money to run on a level playing field. To have real political equality we need to respect the principle of "one person-one vote" and guarantee all people equal access to elected officials and decision makers.

The proposal for democratically financed elections grows out of these principles, and has a number of important additional virtues. By eliminating the inherent conflict of interest caused by the private financing of public servants, it will increase the accountability of public servants to the people who elect them. Moreover, it should reverse the escalating cost of elections, restore genuine opportunity for all Americans to run for major public office, free those who run for office from the constant preoccupation with fundraising, and allow those who are elected more time to carry out their public responsibilities. And it ought to save taxpayers the billions of dollars now wasted due to legislative and regulatory favors for major campaign contributions, and increase public confidence in the fairness of the electoral system.

That's a full plate of promises. Let me now fill in the idea of democratically financed elections so we can assess its prospects for delivering on them.

How It Would Work. To be eligible for public financing -- beginning with the primary election -- a candidate would need to raise a relatively large number of $5 "qualifying contributions" from within his or her election district. These contributions would represent an initial indicator of support; they would show more of a commitment by the contributor than would a willingness to put his or her signature on a ballot access petition. At the same time, by keeping the amount of each contribution at $5, we ensure that they are affordable for the poorest citizens; and by setting the required number of contributions high, we can ensure that candidates get contributions from beyond their immediate circle of supporters. The joint effect of low amounts and high numbers would be to favor candidates with grassroots support rather than, as now, candidates with access to large amounts of start-up money.

Prior to the beginning of the designated primary period, prospective candidates would be allowed to raise a limited amount of private, pre-primary "seed" money (with a $100 limitation on contributions). This money could only be spent for the start-up costs of qualifying for public financing. It could not be spent during the primary or general election campaign periods.

The $5 qualifying contributions and the seed money would be the only private money allowed in an election. Because the overall amount of private money is small, and because of the restrictions on the use of these private contributions, they would not compromise the integrity of a system of total public financing for primary and general elections.

Candidates who raised the required number of qualifying contributions would get public financing for the primary campaign, and all qualifiers would receive the same level of support. Under the system of democratically financed elections, primaries would serve a dual function. As now, they would determine a party's candidate in intra-party competition; but in addition, they would provide a fast-track qualifying test for candidates of new or previously ineligible third parties. If a party received at least 20% of the primary vote (that is, of the total vote for all candidates), its winning candidate would qualify for full public financing. Candidates of parties that received between five percent and 20% would receive a proportional amount of support. Other provisions allow for independent candidates to prove their eligibility for public financing.

Candidates who qualify for public financing would get both free media and discount rates for their advertisements. They would, however, have to accept specific format regulations. For example, they would have to appear on-screen for half the length of each ad. Participation in debates would also be required, and each state would be authorized to create a voter information organization to plan the debates and distribute information about the candidates and their positions to all postal customers.

Finally, democratically financed candidates would also be assured of matching funds if their opponents opted for private financing and spent more than the public financing limits. Private financing is still an option under the democratic finance proposal, because the system is voluntary, as is required by the 1976 Supreme Court ruling in Buckley v. Valeo. Additional matching funds would also be allocated to democratically financed candidates targeted by "independent expenditures" of non-candidate groups and individuals, thus discouraging such expenditures.

Political Parties. Under the current system, candidates have become like individual political entrepreneurs. As long as they are able to raise their own private money, they have no need for -- and can safely ignore -- the ideological discipline that is the strength of a political party. Total public financing would promote stronger and more cohesive political parties. As private associations, parties can, of course, raise private money; but there would be a limit of $100 on the amount an individual or an organization could give to a party. And to avoid the problems of well-heeled parties pouring money into particular races, political parties would not be able to pass money on to individual candidates. They would, however, be able to fund, up to an aggregate value of ten percent of their public financing, in-kind contributions to candidates (such contributions are defined by current election law). This provision would ensure to a political party some hold over its individual candidates, and would encourage loyalty to a party and its platform by candidates who receive this type of support.

Enforcement. A system of total public financing would be surprisingly easy to monitor. Qualified candidates would not receive money but credit from a federal account regulated by the Federal Election Commission (F.E.C.). The credit line would be large enough for challengers to compete effectively against incumbents. Candidates and their staffs would be issued special F.E.C. credit cards with which they would make campaign purchases and pay their bills. The law would prohibit payments by cash or check for any campaign expenses. Under this system, candidates would have to budget carefully -- a useful discipline for prospective public servants.

Costs. With a system of democratically financed elections, the costs of election campaigns would fall dramatically: all fundraising expenses (now a major item in campaign budgets) would be eliminated, and media costs would drop sharply. The estimated cost of democratically financing all federal elections, for example, would be less than $10 a year for the average taxpayer. (This calculation includes payments to democratically financed candidates who receive matching funds when they run against opponents who privately finance their campaigns.) Taxpayers now pay hundreds of dollars each year for the corporate bailouts, tax breaks, subsidies, and regulatory exemptions that special-interest campaign contributors wrest from the federal government. So $10 a year is a small price to pay for free and fair elections, political equality, and a government responsive and accountable to the people.

Some might argue that such a system cannot work -- that it will be impossible to cut private money out of the political system, and impossible to restructure our political system fundamentally without first completely overhauling American capitalism. It is true that a major stumbling block to serious campaign finance reform is that profound economic inequalities foster serious political inequities. Yet history tells us that social and political change can and does proceed in the face of opposition from economic forces in this country. A long-term vision of democratic reform in the United States must include the democratization of our economic structure, the natural next step after reform in the political sphere. But if change is to come at all, it must begin with the "rules of the game."

Needed: a Pro-Democracy Movement

How can we change those rules? A serious answer to this question must begin by emphasizing again that the stakes in changing the way we finance elections are bigger than the problem of money in politics -- that the issue is electoral democracy itself. Fundamental reform of the role of money in politics is a necessary but insufficient remedy for all the inequities of the political process. Within the electoral arena, for example, reform goals must also include universal voter registration, free and equal media time for all qualified candidates, required candidate debates, fair ballot access for independent and third party candidates, and allowance for multi-party endorsement. Looking beyond the conduct of elections, we need to begin to grapple with fundamental issues that have scarcely begun to be raised: public ownership and control of our mass media, eliminating government secrecy and public deception, decentralizing political decision-making wherever possible and appropriate, and, ultimately, democratizing the economy itself. Solutions in each of these areas must be judged by the extent to which they serve a larger moral and political vision of a participatory democracy -- a politics of human dignity and equality.

Success in moving this broad agenda forward will depend on a number of interrelated factors. But the most important is the organization and activism of citizens. Only a broad-based, inclusive, grassroots citizens movement can sustain the political pressure needed to force politicians to enact real change. Given the breadth of the agenda and the long-term nature of the struggle, we need a genuine pro-democracy movement to make it happen, a bottom-up movement akin to, and growing out of, the Voting Rights Movement of the 1960s.

Conventional wisdom, always quick to accommodate itself to current "realities," might insist that successful democratic reform is impossible. But as Justice Brandeis once remarked, everything worth doing was at one time thought to be impossible. Moreover, we should take heart from our own history. Our system of political democracy began as a revolutionary 18th century experiment -- including the Civil War -- it has unfolded since then as an evolutionary series of major democratic reforms. A generation after the American Revolution, full and equal political opportunity was still reserved for white, male, property owners -- a small fraction of the adult population. As time passed, however, suffrage restrictions came to be considered unjust and undemocratic. After years of struggle by long-enduring citizen movements, each such restriction was abolished. In none of these instances was Congress or the President the engine of reform; the impetus for change has always come from the people, particularly those most disenfranchised.

But where might a pro-democracy movement begin in the 1990s? Given the magnitude of the agenda, any single effort seems disproportionate to the task. To come full circle, we could make a promising start by reforming our current system of privately financed election campaigns and moving to a system of electoral democracy where the idea of political equality has real meaning. Because we are a democracy, elections must be democratically financed: this basic idea can serve as the linchpin of a new democracy movement. People already appreciate its importance, already are outraged by obvious inequities in the current system, and already understand their loss of democratic rights.

The biggest challenge to launching such a movement lies in the need to confront conventional thinking. In part that is a matter of getting away from the narrow, good government version of campaign finance reform. More broadly, the problem is that most people have come to regard current conditions as acceptable, if only because they think those conditions cannot be changed. As Thomas Paine wrote two hundred years ago, "A long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom."

But when the public is sufficiently aroused by an injustice -- when a simple truth becomes self-evident -- the process of reform, though never easy or quick, is always sure. When it comes to private money in politics, the simple truth was stated forcefully by reformer Philip M. Stern: "In a society in which money is so unevenly and unjustly distributed, money should not be the medium of political democracy." The road to genuine political equality may be long and arduous -- we will meet strong resistance and face the distractions of placebo "solutions." But if we are committed to the principles and promise of democratic self-government, it is the only road worth traveling.

Originally published in the March/ April 1993 issue of Boston Review

Copyright Boston Review, 1993–2005. All rights reserved. Please do not reproduce without permission.

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