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December 17, 2014

The following guest post is by Ray La Raja of UMass, Amherst. Professor La Raja has written extensively about the impact of the changing campaign finance environment on the parties. He is the co-author with Brian Schaffner of "When Purists Prevail: How Campaign Finance Reform Polarizes American Legislatures" (Forthcoming from University of Michigan Press).

 

The recent bipartisan bill passed by Congress, known by insiders as CRomnibus, contained a mischievous rider that raised the hackles of political reformers. The rider raised significantly the federal contribution limits to parties. Reform advocates like Fred Wertheimer of Democracy 21 called itthe most corrupting campaign finance legislation ever enacted.” I disagree. In my view it improves on a campaign finance system that had virtually collapsed in the years since the McCain-Feingold reforms passed in 2002.

 

The deal struck between Republicans and Democrats appears to address the frustration of party leaders that money was flowing to non-party entities and diminishing the electoral clout of the party organizations under their control. Outside groups had no limits whatsoever on contributions or spending. Under McCain-Feingold, in contrast, parties were limited to $32,400 per individual per year. That’s still a lot of money, but not nearly as much as what billionaires have been giving to Super PACs and other organizations.

 

At the same time, the new rules are rather strange in the way parties will be able to raise funds, as the contribution chart indicates below. Rather than simply lift the limit on traditional contributions, the negotiators agreed to allow parties to raise money up to $97,200 for each of 3 different additional accounts. One account would be for party conventions (only for RNC and DNC), a second account would be used to defray building expenses, and a third for legal fees related to vote recounts and other legal counsel. All told, a donor who wants to maximize contributions to the national committees could conceivably give $777,600 to party committees each year. That means more than $1.5 million during a 2-year election cycle.

 

Current and Proposed Annual Individual Contribution Limits to Political Parties

 

 

 

 

 

 

 

 

Current Limits

Proposed Additional Segregated Accounts and Associated Limits

 

 

Traditional Individual Contributions

Convention Committees

Building Committees

Recount/Legal Committees

Total Possible Contributions

 

 

 

 

 

 

National Party Committees (e.g. DNC, RNC)

$32,400

$97,200

$97,200

$97,200

$324,000

 

 

 

 

 

 

House Campaign Committees (e.g., DCCC, NRCC)

$32,400

N/A

$97,200

$97,200

$226,800

 

 

 

 

 

 

Senate Campaign Committees (e.g., DSCC, NRSC)

$32,400

N/A

$97,200

$97,200

$226,800

 

 

 

 

 

 

Totals

$97,200

$97,200

291,600

$291,600

$777,600

Source: Congressional Research Service

 

 

 

 

 

I’m sure the Republicans would have preferred simply to eliminate all contribution limits. But Democrats feared a GOP juggernaut built on wealthy conservative donors (this despite the fact that Democrats have a lot of wealthy donors too). The Democratic Party, which has staked its brand to supporting political reforms, would undoubtedly hurt themselves with their progressive base if they removed all limits. And yet the Democrats understood that an adjustment to McCain-Feingold could help them. Republican efforts to implement voter ID requirements have increased legal costs to Democrats who have hired a small army of lawyers and election observers to ensure their loyal voters can cast ballots. This change to McCain-Feingold gives leadership a hefty bank account for this purpose (much to the delight of election lawyers).

 

Both parties also found a neutral zone with respect to the problem of paying for conventions. Rather than take precious money from campaign accounts, both parties saw mutual benefit in setting up special accounts to defray convention costs. This issue was especially salient given that Congress recently repealed public financing of these events.

 

Okay, these deals seem like the petty motives of the party hacks. But why do I think the changes are good for the rest of us?

 

First, raising party limits should improve transparency and accountability. A greater portion of cash, which is now swishing around outside the formal campaign finance system, will flow instead through highly transparent parties. The party organizations have seen their financial positions erode relative to outside groups since the beginning of McCain-Feingold, thanks especially to judicial decisions that allow interest groups to raise and spend without limits. Many outside groups have opaque names like “American Crossroads” and some do not have to disclose their donors. In contrast, the Democratic and Republican Parties are clearly recognizable names and they supply lists of all donors to the Federal Election Commission. Voters know what they stand for and which candidates belong to them. I would much rather have money flowing through parties if only for these reasons.

 

But there’s another reason too. Making parties the central financiers of elections strengthens their vital role in the political process. Any political scientist will tell you (particularly those who write for this blog) that parties play a unique role in a democracy: they help aggregate diverse interests in the polity, frame electoral choices, and organize governing. Financially strong parties have the wherewithal to diminish the clout of the most extreme interest groups and Members of Congress who don’t ever want to compromise. It is no wonder that Tea Party folks seem to hate the change in the law. My own research with Brian Schaffner at UMass-Amherst also indicates that party organizations tend to finance moderate candidates precisely because party leaders put a priority on winning elections rather than scoring ideological points.

 

Outside groups, in contrast, often support far right or left candidates and relish the prospect of threatening legislators in their own party with nasty campaign ads if they dare think of compromising. One consequence is partisan rancor and gridlock because powerful factions make it harder for legislators to compromise with the other party.

 

You might say that the CRomnibus spending bill of $1.1 trillion is the revenge of the deal-making establishment. That is precisely why factions on the right and left wings of the parties howled when it passed. The icing on the cake was the rider on campaign finance, which was the establishment’s gambit to reclaim lost power.

 

How you think about the rider depends on where you sit. If you favor parties that shun unprincipled deals, then CRomnibus is not for you. If, on the other hand, you favor a system that tamps down on partisan rancor and makes governing easier, then CRomnibus seems like a step in the right direction. These are basic trade-offs: purity versus pragmatism.

 

I certainly do not believe, like Fred Wertheimer, that this is the most corrupting legislation ever passed. Personally, I would have preferred raising the limits on parties to $100,000 or even $200,000 per year, with no proliferation of separate accounts. The new rules seem inefficient and invite gamesmanship. The parties will surely try to stretch the meaning of what counts as expenses for its building fund. Finally, I cannot claim that the new rules decrease the influence of big money. I can think of better ways to deal with that, such as public financing. But the changes do not make the system any worse and, as I note here, in some ways they might make politics a good deal better.

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