POLICY BRIEF FROM AMERICANS FOR TAX REFORM

Campaign Finance Reform

"Congressional Republicans couldn't kill campaign finance reform by squelching it without a hearing earlier this year and the national cry for campaign reform, could convince the senators that this bill is good for politics and good for the country."
-Staff Editorial, The Austin-American Statesman (8/5/98).

"So even if one accepts the reformist notion that voter turnout and voter confidence are problems in America, banning issue speech by political parties is
clearly not the solution. Having less speech, less debate, less discussion
is clearly not going to have a positive impact on voter turnout."
-Sen. Mitch McConnell (R-KY), National Public Radio (10/15/99).

INTRODUCTION:

• In 1974, Congress passed amendments to the Federal Election Campaign Act, which, for the first time, regulated federal campaigns by placing limits on campaign spending and fundraising. Among the limitations made were that an individual could contribute a maximum of $1,000 for each federal candidate during an election cycle. The idea behind the post-Watergate regulations was to free elected officials from the endless cycle of raising money and to restore confidence in government.
• In 1976, the landmark Supreme Court case of Buckley v. Valeo overturned portions of this law by declaring spending on politics amounts to free speech.(1) The limits on campaign spending were overturned, while the limits on contributions were allowed to stand.

WHY THIS IS A LIBERAL LIE:

• Nearly 20 years after the Federal Election Campaign Act, politicians are spending more time than ever to pursue campaign cash and there is an even greater distrust of government. Liberals will argue, "this just proves our need for campaign finance reform." However, as they label the entire system as corrupt, they can never name a single person who is guilty of that corruption. (2)
• Some of the strongest supporters for campaign finance reform are the very people that have allegedly broken campaign finance laws already (Al Gore, Buddhist Temple; John McCain, Keating Five). It is highly ironic that the people that broke the laws should be allowed to re-write them.
• The American Conservative Union (ACU) released a report "Who's Buying Campaign
  Finance Reform" which noted that those most interested in seeing that Campaign Finance Reform is passed are wealthy liberal special interest groups and foundations (Ford, Rockefeller, Pew) that underwrite them. (3)
• The National Right to Work Committee estimates that Union political contributions
  (both donated and in-kind) exceeded one billion dollars during the 2000 election cycle. About 90% of this money is given to Democrats or left of center candidates. (4)
• Compare this with $495 million that was given in the 2000 election cycle by corporations to conservatives. (5)
• Campaign finance reform would handicap conservatives by insisting on a ban on corporate soft money, while ignoring the fact that unions give far more soft money - most of it questionably siphoned off workers' paychecks - which corrupts the system more than freely given corporate donations ever could.
• Democratic Minority Leader of the House of Representatives, Dick Gephardt, once said, "what we have here is two important values in direct conflict: freedom of speech and our desire for healthy campaigns in a healthy democracy. You can't have both." (6)
• If the Left is successful in "reforming" the campaign finance system, it will result in a government take-over of the election system with more regulations and possible public funding of elections. A government take-over of the electoral system is what happened in the Soviet Union.
• Those who insist on campaign finance reform are at odds with more than 18 million Americans who make voluntary party or Political Action Committee (PAC) contributions. (7)

• Commenting on the Buckley Supreme Court decision, Professor Bradley Smith of Capital University remarks, "the court recognized that limits on spending can restrict speech just as surely as can a direct prohibition." (8)
• When the $1000 limit per-campaign per-person limitations were placed on how much an individual can give to political causes a mustang was valued at $2700. The amount one can give to political causes has not kept up with inflation. (9)
• In 1994, spending on all Congressional races averaged about $3.00 per eligible voter, or about the cost of a single movie rental. In 1996, total spending was less than what was spent annually on Barbie dolls.(10)
• Also in 1994, total direct campaign spending for all local, state and federal elections, including congressional elections, was between $7.50 and $10 per eligible voter. (11)
• In 1996, the HomeDepot spent more money to advertise than did presidential candidates Bob Dole, Bill Clinton and Ross Perot - combined. (12)
• In 1996, total PAC contributions were about the same cost to produce the latest Batman movie. (13)
• Americans spend twice as much on yogurt and two to three times as much on the purchase of potato chips as they do on political campaigns. (14)
• Total spending on all political activity in this country amounts to approximately five-hundredths of one percent of GDP-less than is spent in nations as varied as Canada, Germany, and Venezuela. (15)
• Spending is important to educate and create interest in elections, candidates and issues. The simple fact is it costs money to communicate and the diversity of today's media outlets makes it harder to do so.
• If anything, more money is needed in politics; those involved in marketing acknowledge that to sell a successful product requires repetition. Corporate America recognizes the cost to communicate and the amount spent on political campaigns pales in comparison to what is spent to advertise a product. The sum of the annual advertising budgets of Procter Gamble and Philip Morris Company, the nation's two largest advertisers, is roughly equal to the amount spent by all federal and state political candidates and parties in a two-year election cycle. (16)
• To ensure a positive campaign requires more repetition of positive advertising counteract negative ads that are more memorable. For example, Lyndon Johnson's 1964 "Daisy" ad against Barry Goldwater aired just one time. (17)
• Michael Malbin of the Rockefeller Foundation has said that, "having money means having the ability to be heard; it does not mean the voters will like what they hear." (18)
• And in modern elections Malbin's statement is increasingly becoming reality. For example, in 1994, 34 victorious Republican challengers in Congress spent, on average, just two-thirds of the amount spent by their Democratic opponents who also enjoyed the inherent advantage of incumbency. (19)
• In 1994, Michael Huffington spent approximately $24 million of his own fortune
  to run for the U.S. Senate. He lost. (20)
• In 1996, Senator Phil Gramm (R-TX) raised the most money for his Presidential campaign but was the first to drop out of the race. (21)
• In terms of influence we often hear that money buys election but consider that, (22)
  • More often than not, people give to candidates for the same reason they gamble; they believe in the prospect of winning.
  • It is the desire of donors to give to candidates that are likely to win; the
    popularity of the candidate and their ability to win attracts them to potential donors, not the other way around.
  • No candidate is free from being influenced, and while money may play a small role, far more influential are the personal friendships, the staff of the lawmakers and their spouses.

CONCLUSION:

• Some of most spirited debates in this country were the result of a significant amount of money spent on politics. Ross Perot and Steve Forbes are alike in that both pushed major issues to the forefront of the national scene, the balanced budget and the flat tax respectively. But each used their wealth to make up for the lack of an organized constituency.
• Campaign finance reform is a liberal recipe to "get even with conservatives" by creating more regulations in politics which will only further stifle free speech.
• It costs money to communicate.
• Even Common Cause recognizes that as government has gotten larger there is also an increased need for lobbyists often the agents of the special interests who are hired to secure more funding for their clients. (23)
• The enormous cost of government has resulted in politicians becoming unaccountable for their actions. Thus, people feel that "Government is too big, there is nothing I can do about it anyway." Consider the following chart of Government spending compared to voter turnout since 1960. (24)

Conservatives argue that real campaign finance reform consists of cutting the size of government, making it more accountable to the people.

NOTES
1. Buckley v. Valeo, US. Sup. Ct. 424 U.S. 1 (1976)
2. Staff Editorial. "The Perpetual Campaign" The Detroit News. 11 March 1999.
3. ACU Foundation Report. "Who's Buying Campaign Finance Reform" 26 March 2001.
4. National Right to Work Committee Fact Sheet, April 2000.
5. Opensecrets.org. Business-Labor-Ideology Split in PAC, Soft & Individual Donations to Candidates and Parties, 2000 Report.
6. Gibbs, Nancy and James Carney. "The Wake-up Call." Time Magazine 3 February 1997, pg. 22.
7. Smith, Bradley A. "The Campaign Finance Follies." Commentary. December 1999.
8. Ibid.
9. McConnell, Senator Mitch. Press Conference on Campaign Finance Reform. 14 October 1999.
10. Smith, Bradley A. "The Campaign Finance Follies." Commentary. December 1999.
11. Smith, Bradley A. "Faulty Assumptions and undemocratic consequences of Campaign Finance Reform." Yale Law Journal. January 1996.
12. Smith, Bradley A. "The Campaign Finance Follies." Commentary. December 1999.
13. Ibid.
14. Will, George. "So we talk too Much." Newsweek Magazine. 28 June 1993 (figure on yogurt)
Ansberry, Clare. 'The Best Beef Jerky Has Characteristics Few Can Appreciate." The Wall Street Journal. 4 April 1995.
15. Smith, Bradley A. "The Campaign Finance Follies." Commentary. December 1999.
16. Smith, Bradley A. "Faulty Assumptions and undemocratic consequences of Campaign Finance Reform." Yale Law Journal. January 1996.
17. Raasch, Chuck. "Looking back, current campaign may not be so negative." USA Today. 16 March 2000.
18. Jacobson, Gary C. "The Effects of Campaign Spending in House Elections: New Evidence for Old Arguments." 34 Americans Journal of Political Science. Pages 334, 342-43. (1990)
19. Smith, Bradley A. "Faulty Assumptions and undemocratic consequences of Campaign Finance Reform." Yale Law Journal. January 1996.
20. Ibid.
21.Smith, Bradley A. "The Campaign Finance Follies." Commentary. December 1999.
22. Ibid.
23. Price, Jenny. WMC, WEAC rank high on lobbying list." The Associated Press. 6 August 1999.
24. Voter Participation data obtained from the Federal Election Commission. Because voter participation drops dramatically during "off year" elections, a "best fit" line was added. Government Spending obtained from the Office of Management and Budget, Federal Outlays in Constant 1996 dollars.