Public vs. grassroots campaign financing (part 3)

Earlier, I argued that grassroots campaign funding doesn’t really make campaigns more democratic. Public campaign financing is better, but only if it is designed to actually level the playing field. The U.S. federal campaign finance system is not well-designed for this.

One of the often cited problems with public campaign finance in the United States is its susceptibility to ‘loopholes.’ While most campaign finance systems will attempt to impose some constraints on private contributions, it appears that the politically motivated always find a way around the restrictions. 527 organizations are the most notable examples of this, but there are others. For example, a thorough study of the donors to local campaigns will reveal that in many cases all the employees of a particular company will individually make donations to one candidate up to the local limits. If it is possible for the leadership of the company to pressure employees to contribute in this way, then company has effectively gotten around the legal restrictions its own ability to donate as a company.

The typical response to this sort of news is the call for stronger restrictions and better enforcement of them. But this generates a backlash. Many argue that we have a right to make private campaign contributions, a right derived from our right to free speech. Whether or not this moral argument is correct, it has been enforced by the Supreme Court in Randall v. Sorrell. In addition, many see private ‘grassroots’ campaign contributions as a revitalization of political participation.

So removing the influence of money from politics completely appears hopeless. Thankfully, one fact means that despite ‘loopholes’, public campaign financing still can mitigate the problem of unequal representation based on wealth.

That fact is the diminishing returns of campaign funding. A candidate with a $15,000 budget has an enormous advantage over a candidate with a $5,000 budget. But if candidates’ budgets are $30,000 and $20,000, then the advantage is much smaller even though the dollar difference is the same. At some point the campaign message saturates its audience. Empirical research into the effects of campaign finance consistently report that the effect on elections of differences in funding between major candidates is surprisingly small

What public campaign financing can have a big effect on, though, is who gets to be a major candidate in the first place. Third party candidates don’t get a break in our system. And in states where the major party PAC’s have a lot of funding and power, representatives from low income districts can be held hostage to the interests of their state PAC without whose support they would not be able to run for office. A strong and fair system of public campaign financing solves these problems.

So ultimately, grassroots funding and public campaign financing are compatible–we can have a system that allows for both. But public financing is absolutely necessary to reduce the effects of money on politics, even if it can’t eliminate them entirely.