Second Thoughts On Campaign Finance Reform

In a previous post, I discussed the benefits of having the federal government match private campaign contributions with public funds:

http://chicago-freedom-forum.blogspot.com/2010/07/campaign-finance-reform.html

A much respected colleague of mine pointed out (I paraphrase) in matters of policy, G-d resides in the details. In other words, even if matching campaign funds is good in theory, in reality it would be administered in a way that would be deleterious to the democratic process and benefit those who were already in power. In his own words:

"I am enough of a cynic that our representatives would not pass and our President would not sign into law a bill that could not be manipulated to give some favored group an advantage.

If the Republicans were in power and passed a campaign finance bill they would act in a similar fashion; shifting the laws to make it more difficult to vote them out of power.

If the money to run a campaign came directly from the government, rather than under restrictions imposed via the government, manipulation of who gets money and who doesn’t would be even more blatant."

Such a bill would most likely be thousands of pages and very few, if any members of congress would take the time to read it, as was the case with the bailouts and health care reform. So, even though I do recognize that special interests are exercising undue influence on the democratic process, I believe that having the federal government provide matching funds holds great risk and hence we must look for other solutions. I am hoping that a lively public debate will emerge.

Campaign Finance Reform

I am sure that many of my readers will be surprised to hear that I (Mr. Small Government) support a costly system of public financing of elections. Such a system would match private political contributions with X amount of funds. The purpose would ideally make politicians less beholden to powerful corporations, labor unions and special interests. Hopefully this would allow them more politicians to focus on general public interest versus narrow special interests. In addition, I would recommend limiting the campaign to no more than a month, that would keep costs down and allow politicians to focus more time and energy on governing and less on getting elected. These would be much needed 1st steps to curbing corruption. A second and more difficult step would be to lower incentives for powerful interests to seek favors from politicians, by minimizing the role of the state as a redistributive bureaucracy.

Wednesday, July 07, 2010

Groups launch effort to change campaign money law

By JIM KUHNHENN

Two groups that have long advocated public financing of elections plan to spend at least $8 million this year to prod Congress to vote on proposed legislation aimed at reducing the influence of big donations in politics.

The joint effort by Common Cause and Public Campaign, called the Campaign for Fair Elections, will launch its first wave of advertising this week aimed primarily at Democrats who have yet to sign on in support of the bill.

The legislation would give candidates $4 of public financing for every $1 dollar raised through contributions of $100 or less. Participation would be voluntary, and candidates could opt out from the system.

Advocates hope the matching money would be so attractive that it would discourage politicians from having to chase big financial contributions from special interest donors.

Proponents estimate the public infusion of money would cost up to $1.8 billion for every two-year election cycle. David Donnelly, the campaign manager for the Campaign for Fair Elections, said one way to pay for the cost would be with a tax or fee on large government contractors.

The Common Cause-Public Campaign coalition will air ads in television markets in Seattle, Denver, Tallahassee and Washington D.C. and are intended to win the support of Democrats such as Jay Inslee, Rick Larsen and Brian Baird of Washington, Diana DeGette and Ed Perlmutter of Colorado, and Allen Boyd of Florida. More ads in other markets are planned later, Donnelly said.

So far, the legislation has 157 co-sponsors, all but three of them Democrats _ not enough to guarantee passage. Prospects are tougher in the 100-member Senate, where major legislation typically requires 60 votes. The bill only has 21 Senate co-sponsors.

Donnelly and Bob Edgar, a former congressman and now president and CEO of Common Cause, said anti-Washington sentiment, bank bailouts and the Deepwater Horizon oil spill in the Gulf of Mexico make the timing ripe to shake up how politicians raise money.

"Democrats and Republicans who are strongest on reform will buffer themselves against anti-incumbent anger," Edgar said.

Donnelly said the joint campaign expects to spend between $8 million and $15 million this year to promote the legislation. He said $2.5 million of that amount has already been spent.

Among those financing the effort is Arnold Hiatt, the former CEO of Stride Rite Corp. and major Democratic Party contributor who earlier this year urged other big political donors to give only to candidates who committed to support the legislation.

___

Online: http://campaignmoney.org

Nahhhh...

The insurance giant AIG received an additional $30 billion dollars bringing the grand total to 170 billion, yes that's billion with a "b." Could that have anything to do with the campaign contributions made to key members of the Obama administration and the democratic party?

Dodd, Christopher $104,300
Obama, Barack $45,111
Clinton, Hillary $36,831
Biden, Joseph R Jr $19,975

Nahhh....of course not!

Fannie Mae and Freddie Mac received billions from the government. Could that have anything to do with the fact that the two largest recipients of campaign contributions were Christopher Dodd ($165,000) and Barack Obama ($126,349)

Nahhh...of course not!

A Progressive Argument Against Big Government...

"Progressives" frequently lament "corporate welfare," or in more economical terms they oppose subsidies and tax exemptions granted to politically connected corporations. Amazingly, I am 100% in agreement with them.

In theory a strategic, temporary subsidy based on sound economic logic could yield a net benefit. The problem is that rarely, if ever the redistribution of tax payers money is based on sound economic logic.

In Washington DC there are over 30,000 lobbyists that disburse several billion dollars a year to a multitude of politicians. The pharmaceutical industry along disbursed over $900,000,000 between 1998 - 2005. Of course this had nothing to do with the Bush administration's passage of Bush's 2003 prescription drug plan...

The size and scope of lobbying indicates that without a doubt that the redistribution of tax payer money is based not on economic or social logic, but on political connections engendered by large campaign contributions. And we can be certain that the connected corporations receive a massive return on their political investment. In fact, the Carmen Group, a mid-sized lobbying firm claims that for every $1,000,000 that its clients spend on its services, it delivers over $100,000,000 in government benefits!

So, I find it absolutely puzzling how "progressives" can support big government when tax payer funds are redistributed not according to sound economic or social logic, but to the corporations and interests that are most politically connected. In other words money will inevitably flow towards the most wealthy and connected interests. And even "noble programs" like the prescription drug plan are inevitably organized to maximize the gain of large corporate interests, as seen by clauses that allow pharmaceutical firms to greatly increase the cost of their products.

"Progressives" should not view "corporate welfare" as an aberration, but as the inevitable outcome of a redistributive state. Until the magical day in which government is clean and organized for the benefit of the public, "progressives" should be extremely cautious about expanding the size and scope of the state.

http://www.washingtonpost.com/wp-dyn/content/article/2006/09/08/AR2006090801610.html