Q

Soft Money and Politics

In New York, Hillary Rodham Clinton and Rick Lazio have agreed not to allow soft money to pay for radio and TV broadcasts in the state during their race for the Senate. I am trying to figure out why they have done this, other than to win (as they did) a favorable editorial in the New York Times.

Soft money, as almost everyone knows, is a contribution made to political parties that can be used for purposes other than directly attempting to elect a favored candidate. These contributions are not regulated by the federal government, and so parties can raise as much as they want from whomever they want, provided they don’t use it to run ads that say, “Vote for Hillary!” or “Vote for Rick!”

The growing reliance on soft money is in part the result of restrictions on hard money. Hard money—that is, money regulated by federal law—is scarce. Corporations and labor unions cannot contribute any money to candidates. A political action committee can give no more than $5,000 to candidates or more than $15,000 to a national party (and most give a lot less). An individual can give no more than $1,000 to a candidate in an election or more than $20,000 to a national party in a given year. These federally controlled levels are so low that, were political parties to rely on them exclusively, they would almost have to go out of business. Soft money—unregulated money—provides a way for parties to run issue ads and mount get-out-the-vote drives.

Advocates of campaign-finance reform don’t like soft money, but they rarely explain exactly why. They seem to rely on the idea that rich people are buying politicians. The Times wants to ban “unlimited party donations from corporations, unions and rich individuals.” Of course, no one thinks that parties, candidates, and office-holders should be for sale. And no one can deny that in a country with well over 500,000 elective offices, some politicians have been for sale.

But what is striking is that no one has shown any systematic evidence that soft money—or money generally—has corrupted American political life. Scholars who have looked at the effect of campaign contributions on the behavior of elected representatives have not found much effect once you control for what is really important—constituency representation, political party membership, and ideology.

There is a good reason for the weak power of money: When everyone can contribute, most politicians gather money from so many sources that claims made by one source of funds tend to cancel out those from another source. If you doubt it, ask any corporate public relations officer how they feel about campaign finance. Most will tell you that it is a system of political demands (some use stronger words, like extortion) made by politicians who extract money from every donor in sight.

There are ways to cut back on the hypocrisy and rule-bending that accompany a lot of campaign finance. One is to get rid of the ridiculous distinction between soft and hard money. It is legally unworkable and philosophically meaningless. Let every party and every candidate publicly report, on the Internet, every dollar they raise above some small minimum and require them to do it within 24 hours. If every dollar you or a party collects is publicly known overnight, reporters will be told immediately by Internet geeks just who is trying to influence whom, and the reporters will tell us the next day.

Ban contributions from corporations and trade unions. It is wrong for a union to spend its members’ dues on elections, and it ought to be just as wrong for a corporation to spend its owners’ dividends on them. And then dramatically increase the amount any individual can give, with a built-in cost-of-living index so that the amount keeps up with inflation.

When I say a big increase, I mean just that. Incumbents now have such huge political advantages that a challenger needs some big breaks. One way is to make it easy for them to get into a campaign with the aid of a few large supporters. (That is how Eugene McCarthy, George McGovern, and Ronald Reagan got started.) How big is big? I would not object to $50,000 or even more. And let individuals give equally large amounts to the national political parties.

This won’t freeze out the little fellow because the little fellow who now contributes $100 or $200 or $500 to a candidate gets nothing in return except more letters demanding more contributions. That won’t change if you raise the upper limit on donations. The goal of fund raising is not to eliminate class distinctions, but to ensure that opposing interests are equally likely to contribute. If Bill Gates gives $50,000 to a candidate, I would not care as long as Steve Jobs gives a like amount.

There is, of course, an alternative: Let the taxpayer foot the bill. That might work if every election was between two people. We could figure out how much each would cost by multiplying 435 House seats and (roughly) 33 Senate ones by some appropriate number. I doubt the voters would permit this, but apart from it being politically unfeasible, it is not unworkable. The real elections in this country are the primaries. Since most House races are in essentially one-party districts, primaries decide who gets elected. And it is hard to figure out how the government can pay for primaries that any number of people can enter.

But there is a deeper reason for forgetting about unenforceable and meaningless campaign-finance rules. Money will find its way into politics no matter what we do. Eliminate soft money and that money will be diverted into independent advertisements. End that and the Supreme Court will tell you, 9-0, that you have just violated the First Amendment. Our political system is not based on purity but on competition. Purity is rarely achieved and never lasts, but competition goes on forever.