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Citizens United or Not -- We Aren't Helpless

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However much pleasure President Obama's supporters may gleefully derive from watching his Republican adversaries carpet-bomb each other through their "Super-PACs," what is far more revealing than whether Santorum or Gingrich is eventually the last opponent left standing up to Mitt Romney is how they are going to get there. If our previous campaign financing system was, effectively, an oligarchy of the 1%, the new one is an oligarchy of the .01% -- the people who really control American politics today are the fewer than 10,000 people able to control closely held corporate assets. This is an oligarchy smaller by far than that which governed George III's England, reminiscent more of a state like Pakistan with its 22 families.

The respective fates of Rick Perry and Ron Paul do show that mega-money is not everything in today's politics. And it may be that a sitting incumbent president can raise enough money for his own campaign to remain competitive when he combines those funds with the significant resources of incumbency -- so I am not predicting that the wave of Super-PAC funds Obama will face is going to determine the presidential outcome.

But any highly ambitious American politician, whatever their original motivation, values, or ideology, now understands that the path to high office lies in cultivating super-wealthy supporters with strong corporate power bases.

Clearly, this is terrifying many people, on both sides of the ideological divide, and perhaps in private angering them. But it's surprising how little real energy has gathered to fix the problem -- perhaps because the conventional narrative is that nothing short of a constitutional amendment can fix the problem.

A constitutional amendment, of course, is the best solution -- and important groundwork is being done.  But while congressional leaders like Senators Tom Udall and Bernie Sanders, Representative Donna Edwards, and organizations like Common Cause are pushing for one, they are not getting the public tailwind they need -- even though polls show the idea is wildly popular. The road to an amendment lies through either Congress or state legislatures, both of which seem controlled by the plutocracy the Supreme Court has created, and there is certainly no short-term fix through an amendment.

But there are other things that can be done -- quickly, and effectively -- that can create the groundswell that an eventual amendment will need. An important one took place last month, when the Montana Supreme Court basically said to the U.S. Supreme Court, "take your Citizens United opinion and shove it."

Obama has one important tool to move the ball as well. He can require that federal contractors and their executives disclose all of their political giving, not just the smaller gifts to individual candidate campaigns that federal law currently requires. An executive order to that effect has been drafted, and there is no legal barrier.

"It's simple -- any company that is paid with taxpayer dollars should be required to disclose political contributions," said Rep. Anna Eshoo, D-Calif, who has pushed for the White House to issue the order. "With public dollars come public responsibilities, and I hope President Obama will issue his executive order right away."

A huge swath of the economy -- most of the major players in mega-campaign giving -- is dependent in whole or part on federal dollars. Think about it: Defense contractors, oil companies, computer and telecommunications firms, highway and transportation contractors, auto companies, airlines, computer and technology manufacturers, even paper mills. And what motivates many of these players -- weapons manufacturers, for example -- to give so heavily in federal elections is precisely to keep their flow of contracting dollars robust. Contractors get 15 percent of the federal budget (and an even greater percentage of the discretionary spending), which amounts to 4 percent of the total economy.

When Congress has attempted to limit campaign spending -- during the McCain-Feingold debates for example -- the right-wing response was invariable, "let sunshine be the disinfectant." Disclose, no more. But when Congress tried to require disclosure of Super-PAC contributions, the Republican leadership mobilized to stop such legislation and last year even attached legislative riders to ensure that Obama did not act to require disclosure from contractors. But those riders have now expired -- nothing but a reluctance to rock-the-boat prevents the president from acting today. But there's not much organized public pressure on him to do so. My guess is that even the Tea Party would welcome a serious demand for contractor disclosure.

But we shouldn't, and needn't, stop with contractors and disclosure. Congress has the power to fix our campaign finance system, Supreme Court or no. This Congress won't. But if progressives and the anti-corruption wing of the Tea Party joined forces this fall to demand it, the next Congress could.

The solution lies in -- tax cuts.

Non-profit corporations have long paid a substantial tax for the privilege of engaging in politics. Tax-deductible nonprofits (charitable c3's) can do nothing to influence an election and can lobby in only a minimal way. Tax-exempt but not tax-deductible c4 orgs can lobby to an unlimited degree. They also can engage in politics, as long as it does not become their primary purpose -- but they face a substantial tax penalty if they do so. So the constitutional principal is established -- Congress could set different tax rates for corporations based on their political involvement or lack thereof.

Why not create two classes of corporations. One, let's call it "enterprise corporations," would stay out of politics. Not only would they not give corporate funds to campaign committees like the Super-PACs, but these corporations also would not use their funds to create corporate PACs, the other bane of our system. They would not pay dues to organizations like the Chamber of Commerce, which uses those dues for politics. They would engage in free enterprise -- business, not politics. And, as a result, they would have a lower corporate income tax rate than the second group of corporations, call them "advocacy corporations." These corporations could do all the things the Supreme Court has guaranteed them over the years -- everything short of explicit bribery of politicians. But, in exchange, they would pay a significantly higher corporate tax rate than enterprise corporations.

There would be no need for a confiscatory tax level for influence corporations. Corporate shareholders would find quite appealing the idea that they could simultaneously save the money they currently spend on politics and qualify for a lower tax rate. Yes, truly closely held entities like Koch Industries might choose to pay the higher taxes. There would be advocacy corporations. But we would all know who they were, and they wouldn't be able to hijack the rest of American business to go along with them through the Chamber of Commerce. Most major corporations would welcome the chance to get out of the influence game and focus on their core businesses.

Indeed, the CEO of Starbucks, Howard Schultz. has created a movement of corporations that are going to refuse to give campaign money even without the tax sweetener that I am proposing.

What I find most appealing about this idea, which was first generated several years ago by Damon Silvers, a friend of mine, is that it doesn't require a supermajority in the Congress (well, leaving aside the usual filibuster problem in the Senate.) It doesn't require action by two-thirds of the legislatures. It can happen quickly if during this campaign cycle we generate enough grassroots energy to make candidates stand up for an end to corporate influence buying.

Our democracy is, truly, at stake. And we can no longer hide our inactivity behind the excuse that "there is nothing to be done."