How Small Money Can Matter Again in Politics

A funny thing’s happening on the
way to Nov. 6. The billionaires trying to buy the U.S. election
with contributions of $1 million, $10 million or even $100
million aren’t succeeding.

If trends continue and the Democrats have a good year
(still a big if), the notion that in order to win candidates
must accept gobs of money from super-political action committees
will be discredited.

Then we’ll see a small opening for a practical solution to
our corrupt politics that would require no spending limits, no
barring of super-PACs and no constitutional amendment to
overturn the Supreme Court’s Citizens United decision.

This solution would free at least some candidates for
federal office from dispiriting and corrupting lives of endless
fundraising and legalized bribery. It would strike a blow for
democracy, localism and choice (always a crowd-pleaser for the
Republicans) in our elections.

It’s important to understand why the deluge of super-PAC
contributions — and those from shadowy 501(c)4 groups, which
don’t require disclosure — isn’t working as well as Republican
strategists Karl Rove and the Koch brothers or the casino
billionaire Sheldon Adelson may have hoped. (The same goes for
the relative pikers on President Barack Obama’s side, such as
the Priorities USA super-PAC).

Internet Advantage

The reason is that big money in politics has a competitor:
small money in politics. Even though big money is winning this
year — it accounts for more than 75 percent of donations —
small money raised on the Internet is better adapted to the 21st
century political battlefield.

Big money is used mostly to pay for negative television
ads. These spots can still be potent and force the other side to
raise enough money to rebut them. But Americans, especially
younger voters, aren’t watching TV the way they used to. They’re
time-shifting programming and are increasingly cynical about
ads. With all the airwave pollution, saturation levels are
reached earlier, especially if the messages in the ads are at
odds with what’s going on in the news.

Mitt Romney, the Republican presidential nominee, and
several trailing Republican Senate candidates are finding this
out.

Super-PACs can dominate the air war, but they have trouble
buying ground troops. Political strategists know from experience
that phone banks and canvass teams made up of low-wage hired
help are far inferior to those using volunteers sincerely trying
to persuade voters.

The reason the Obama campaign sends out so many irritating
requests for $3 or $5 donations is that these solicitations do
more than just raise cash. Once millions of small donors have a
little skin in the game, they’re much more likely to assist with
registration and get-out-the-vote efforts. This willingness to
help can’t be purchased by super-PACs at any price.

I’m not suggesting that small donations are competitive
yet. In House races in 2010, only 8 percent of contributions
were for less than $200. But with a boost, small money can play
with the big boys.

In “Empowering Small Donations in Federal Elections,” Adam
Skaggs, of the Brennan Center for Justice, and Fred Wertheimer,
the founder and director of Democracy 21, offer a voluntary plan
based on the very successful model adopted in New York City.
Contributions of $250 or less would be matched by federal funds
at a 5-to-1 ratio. Thus, $250 would yield $1,250, which would be
the upper limit on allowable contributions for the candidates
who participate. (That cap might be too low, but let’s not
quibble.)

Donation Caps

The system would require a certain threshold of in-state
donations to encourage local participation and would be capped
at $2 million for a House campaign and $10 million for a Senate
race. The total price — $700 million a year — is an enormous
bargain for taxpayers because the changes would help prevent big
donors from buying tens of billions in tax breaks, subsidies and
other favors. If the Republican Party is serious about removing
the special-interest breaks that would be necessary to achieve
comprehensive tax reform, it will need to be shielded by matched
financing of elections.

Candidates who opt out could continue to operate under the
old system, as did Mayor Michael Bloomberg in New York.
But there might be a political penalty to pay for those who
go it alone. In Massachusetts this year, both Senate candidates,
the incumbent Republican Scott Brown and his Democratic
challenger Elizabeth Warren, agreed to keep super-PAC money from
soiling their race.

Lest you think that federal legislation is a pipe dream,
consider that public financing of general elections was accepted
by all major party presidential nominees from 1976 until 2008,
when Obama opted out after the outdated dollar limits in the
matching funds turned out to be lower than the amounts he was
raising on his own. This places a special responsibility on the
president to help restore a system he helped destroy.

So far, 15 states and several cities have public financing
systems, some more effective than others. Republicans, who are
often philosophically opposed to this idea, have been especially
big supporters of its application in Connecticut, where
Republican Governor Jodi Rell was elected in 2006 with small-
donor contributions, and in Arizona, where Tea Party candidates
used the public financing system to unseat establishment
Republican primary candidates. When their interests matched, Tea
Party types forgot their ideological objections, just as they
have in supporting Medicare. This might offer some hope of
getting a bill through Congress.

Unions’ Grip

Small-donor reform also loosens the grip of corporations
and unions. Romney was right when he said this week that “we
simply can’t have a setup where the teachers unions can
contribute tens of millions of dollars to the campaigns of
politicians and then those politicians, when elected, stand
across from them at the bargaining table, supposedly to
represent the interests of the kids.”

Then there’s the wasted time for politicians. Because
Romney is so reliant on big donors, he has to spend precious
hours at high-end fundraisers instead of campaigning among all
voters. The now-infamous video of him dissing the “47 percent
might have taught him the dangers of the system. Obama, too, is
distracted by having to show up at dozens of fundraisers. In
1984, President Ronald Reagan tapped public financing and
attended none.

Finally, the do-gooders have to stop calling this “campaign
finance reform” or “public financing.” That’s bad branding. Next
year, after the fiscal cliff is avoided, the hard work of
building a movement for small-donor reform will have to begin.
Power to the pea shooters.

Jonathan Alter

Jonathan Alter, a contributing editor of the Washington Monthly, is the author of one book about Franklin D. Roosevelt and two about Barack Obama.