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The Hewlett Foundation Blog

Guest Post: McCutcheon, the Parties, and What Comes Next 

April 21, 2014 — By Mark Schmitt

Mark Schmitt is the director of the political reform program at the New America Foundation.

Although the Supreme Court’s decision in McCutcheon was no surprise, it makes sense to be ambivalent about it (as Daniel Stid's recent post about the decision reflects), within the narrow frame of the current state of political money. Ray LaRaja’s op-ed arguing that BCRA (the McCain-Feingold reform) was the original mistake, in that it forced operatives to look outside of the parties for money, is a powerful challenge to conventional wisdom. The key thing to recognize is that in any system based primarily on limits, the person or organization who controls the path around the limits will hold disproportionate power—that path was party soft-money operations in the late 1990s, and outside groups of various forms since 2002. If we recognize that there will always be paths around the limits, that every “loophole” can’t be closed, it becomes essential to think about how they shift power.

My own take on the issue is here. I agree that, given the choice, it’s better for money to flow through parties, which have long-term interests and can be held accountable, than through outside entities. (Those aren’t the only alternatives—let’s not forget that candidates and officeholders still raise and spend more money than either parties or outside groups.) But I don’t go as far as Nate Persily or Rick Hasen in predicting that McCutcheon will strengthen parties, for three reasons: First, we don’t know that the new money from super-max donors will go through party committees: A super-max donor could just as easily use the new opportunity to put money behind 100 individual Tea Party challengers (or their far-left equivalents). Or, the new super-max donors and super-max bundlers—who  now hold the power to work around contribution limits—might use their newfound leverage within a party to push it even further in an extreme direction. Even if they are not ideological extremists in a conventional sense, the policy interests of these very, very wealthy individuals are likely to diverge from the average citizen. Parties could have more money, in other words, but even less power to set their own agenda.

Another possibility is that we can’t get the cat back in the bag, and donors like Sheldon Adelson will continue to find it advantageous to use their own vehicles to set the agenda, rather than subsuming their views in the party. It isn’t obvious that outside spending will naturally flow back to the parties just because the aggregate limit has been lifted. (It’s an easy question to test: How many big outside spenders are also among the tiny number who maxed out to all the committees—that is, did they go outside only after they’d hit the aggregate limits?)

But looking at questions of money in politics solely in terms of a tradeoff of very large donors between parties and outside groups is far too limited a perspective. We want parties to have sufficient resources, but from where? Why not a broad base of smaller donors, who more closely resemble the party’s voters? We want candidates to reach the threshold of competitiveness (candidates and parties can’t be held accountable to the center unless there’s at least some competition)—but does that have to come from a few dozen super-max donors?

Disclosure is good, and we should certainly find a uniform threshold for disclosure of all money that’s intended to influence elections, whether it passes through a candidate committee, a party, or a 501(c)(4). But disclosure is not a partial substitute for a well-structured system that offsets concentrated wealth and creates opportunities for greater participation and competition. Often disclosure creates the illusion of information without the reality—we usually don’t know whether a donor is giving out of ideological or economic interests, for example, or some of both. And voters don’t know what to do about it anyway, since all politicians are taking money from very wealthy people with interests in policy decisions. Disclosure is useful for research, for journalists, for designing better policies, and for criminalinvestigations, and it might deter some political spending by corporations that want to avoid controversy, but it's very hard for voters to use directly. Also, one should have no illusion that there is greater political consensus on disclosure than on small-donor public financing. The Sarbanes bill has one Republican cosponsor; the DISCLOSE Act had two and one of them, Mike Castle, is long gone from Congress.

What McCutcheon marks is the overdue end of the era in which campaign finance reform is defined primarily in terms of limits, and an endless chasing of the inevitable loopholes around those limits. There is an important place for contribution limits for individual candidates and parties, because of the potential for direct corruption. But for the reasons above, limits can’t do all the work. A system that strengthens parties, in their role as aggregators of voters, not just dollars, as well as making it easier for candidates to be heard, requires some kind of system that boosts small donors. That can involve New York City-style matching funds, some kind of voucher, Minnesota-style tax credits, or perhaps mechanisms not yet devised that will encourage candidates and parties to seek out moderate voters and donors. It might work best in conjunction with other electoral reforms. Although these models are popular and resilient at the state and local level, they may be long-shots in the current political climate at the national level. But so is disclosure. It’s important to work on them now, because McCutcheon, while not quite the disaster that some have seen, is in no way a solution.