An idea for campaign finance reform: A small-donor matching system

The U.S. Supreme Courts’ 2010 Citizens United decision–combined with the more recent McCutcheon ruling– eviscerated the last vestiges of campaign-finance sanity and fairness. But those rulings also sparked a quest for a better way to fund our political system. In February 2014, Congressman John Sarbanes (D-MD] introduced a creative idea in a bill that many have found intriguing. The bill, H.R. 20, has been dubbed the Government by the People Act of 2014. In this case, that’s not an Orwellian title. The bill’s stated goal is “to o reform the financing of Congressional elections by broadening participation by small dollar donors.” According to an op-ed by Joe Nocera of New York Times, the bill has three main components:

  • A $50 tax credit per donor per election cycle.
  • A voluntary matching fund system. People who donate up to $150 to a candidate who has agreed to lower contribution limits and the full disclosure of all donations will have that donation matched 6 to 1 with federal funds. If the candidate agrees to take no contributions higher than $150, the match rises to 9 to 1.
  • And finally, it allows candidates to raise additional matching funds in the last 60 days of the election if the candidate feels he needs it to ward off a last-minute advertising blitz. (The bill has disincentives to keep that additional money from being used unless it is really needed.)

The inspiration for the bill is New York City’s public-financing system, which provides public funds to match small donor contributions. The New York City plan specifies that:

In exchange for abiding by strict spending limits, candidates may be eligible to have contributions from individual New York City residents matched with taxpayer dollars. The Program matches each dollar a New York City resident gives, up to $175 per contributor, with $6 in public funds, for a maximum of $1,050 in public funds per contributor. To qualify for public funds, candidates must be in compliance with all Program requirements, be on the ballot, have an opponent on the ballot, and meet a two-part financial threshold that demonstrates a basic level of community support.

The New York City program, which has been used for city-wide and city council races since 1980, has gotten very positive reviews from candidates. A report published in May 2014 by the Brennan Center for Justice notes that:

…[candidates] have told us that by pumping up the value of small contributions, the New York City system gives them an incentive to reach out to their own constituents rather than focusing all their attention on wealthy out-of-district donors.

That’s an important result, because—according to an article published in 2013 in the Columbia Law Review that confirms popular opinion—large donations have a major impact on politicians’ views on issues:

“There is near consensus in the empirical literature that politicians’ positions more accurately reflect the views of their donors than those of their constituents.”

Sarbanes’ bill has garnered co-sponsorship from 149 Congressional Democrats and one Republican. It also has received strong backing from a large coalition of progressive, reform, labor and environmental organizations, including the Sierra Club, Greenpeace, Communications Workers of America, Service Employees International Union, the NAACP, the Progressive Change Campaign Committee and the Teamsters.

In his New York Times op-ed, Nocera notes that Sarbanes’ matching plan has a further advantage:

It engages small donors in the political process—and it gives them an incentive because their money is being maximized. But Sarbanes also likes it for another reason: It forces members of Congress and would-be members of Congress to actively solicit the money — and thus the views — of their constituents. “Because it rewards finding small donors, your priorities change,” he said. “You don’t get co-opted.”

Public financing of elections works. How do we know? Because 26 states have enacted and sustained some kind of public financing of election systems. Those states include Maine, Arizona, New Mexico, North Carolina and Vermont.. The logic is obvious: Public financing of elections puts the power in the hands of voters, not donors. Unfortunately, in the U.S. Congress, logic is the underdog. But I’ll take it as an encouraging sign that at least some politicians are signing on.