"Money On My Mind" is a monthly column by Jay Mandle. The views expressed here are those of the author, (not necessarily those of Democracy Matters or Common Cause), and are meant to stimulate discussion.

April 2009
By Jay Mandle

Last month, Arlen Specter and Dick Durban in the Senate, and John Larson and Walter Jones in the House of Representatives introduced the Bi-Partisan Fair Elections Now Act (Fair Elections), a bill that would for the first time provide public funding for Congressional candidates. Welcoming its introduction, Nick Nyhart and David Donnelly, long time reform advocates, wrote that with its passage voters of average means would no longer “worry that their elected officials are indebted to deep-pocket funders with interests entirely separate from their own.”[1]

Obviously this legislation will not be adopted without a hard fight. The special interests who benefit from the “pay to play” political system will not willingly concede defeat. A wide array of defenses will be mounted in support of the private funding system, including of course the argument that at a time of economic collapse, the last thing we should do is spend public money on politicians. Yet none of these arguments successfully counters the reality that today’s system of private funding privileges the wealthy and thereby subverts democracy.

In fact the present economic crisis is largely the result of the political power Wall Street accumulated as a result of its massive political contributions. If Fair Elections were passed, the banks, hedge funds, insurance companies and all those who gamble in financial markets would find their power greatly curtailed and we would be all the better for it.

The Fair Elections Act is a hybrid plan. Like the “clean elections” systems present in Arizona, Maine, Connecticut, and elsewhere, it provides public funds to qualified office-seekers who volunteer to participate in the system. But unlike the full public funding systems present in those states, the Congressional bill permits an individual to contribute a donation of $100 or less during each of three separate stages of the electoral process (qualifying for participation in the system; running in a primary election; and competing in the general election). In the latter two stages candidates will receive four public dollars for every dollar raised from in-state contributors.

Fair Elections reduces the total amount of money any private contributor can give to candidates during an election cycle from $2,300 to $300. In exchange it provides a substantial grant of public funds and allows a candidate to accumulate private money in small donations.

Small donors are part of all systems of public funding.

These contributions are used as a means of testing the seriousness and viability of candidates. It is important to protect the public funding system against cranks with no real basis of political support. But in the state “clean elections” systems those qualifying donations do not go directly to the candidates. In contrast, with Fair Elections small donations play a dual role. They are used both to qualify for participation in the system and to accumulate campaign funds.  

No violence to democratic norms would be involved with such a system if in fact small donors were representative of the American electorate. Their voluntary participation in the funding process would merely reflect the greater willingness of some citizens compared to others to participate in politics by making financial contributions. Unfortunately, however, the limited data that we have on the subject suggests that even small donors represent a relatively privileged stratum of the population.

In a 2006 survey of donors in five states, the Campaign Finance Institute compared the income levels of donors who made no political contributions with those who gave under $100 and with those who donated between $100 and $500. The differences were substantial. Even donors of $100 or less were notably more affluent than non-donors. While almost half (48.3 percent) of non-donors earned less than $40,000, only 11.2 percent fell into that income category among $100 or less donors. The gap is even greater in the study’s medium donor category. The data are not cut off at the $300 level used by Fair Elections, but among the people who gave between $100 and $500, only 4.9 percent earned less than $40,000. And four-fifths of these donors earned at least $75,000.[2]   

There is of course no danger that small donors – even assuming that they contribute the maximum $300 allowed - will play the same role in the Fair Elections system that big donors do at present. Nevertheless the four to one match does mean that private donations will remain important. Because that is so and because small donors tend to be relatively high income earners, Fair Elections will allow wealthy people to exercise more political influence than the rest of the population.

The fight for Congressional public financing will be protracted. Congressional hearings have not yet even been scheduled. The content of the Fair Elections bills therefore can and should be subjected to intense debate. That debate should emanate not only from the side that opposes egalitarian funding. There should as well be vigorous intervention from those who think that the retreat from the more democratic funding of “clean elections” models is undesirable. Fair Elections should be modified to more closely resemble the “clean elections” systems that at the state level have proved to be both effective and popular.