THE BLOG

The Problem of Independent Expenditures

06/30/2015 02:29 pm ET | Updated Jun 27, 2016

By making large campaign donations to candidates for office and political parties, rich people are able to gain disproportionate influence over the political process. But in the past that power was at least somewhat constrained. In the name of preventing corruption or the appearance of corruption, the Supreme Court allowed limitations to be imposed on direct campaign contributions.

The rise of "independent expenditures" has however effectively dismantled those constraints. The combined effect of the Citizens United decision by the Supreme Court and the SpeechNow decision by US District Court for the District of Columbia, both handed down in 2010, was to free individuals and groups to make unlimited contributions to organizations without formal connections to candidates' campaigns. Those organizations in turn were free to engage in political advertising and organizing without limit. The courts' reasoning was that if political organizations are not explicitly linked to politicians, their expenditures on behalf of those candidates cannot be corrupting. Combined with the fact that the Federal Elections Commission has been blind to the obvious links that do exist between many of those "independent" organizations and electoral campaigns, the court decisions have unleashed a flood of unregulated political donations.

The effect of the two court decisions was immediate and dramatic. As shown in Table 1, independent expenditures compared to spending by candidates' campaigns for the Senate and House of Representatives were of negligible importance until 2010. Thereafter their relative importance grew dramatically. This was especially so for Senate races, where the level of outside spending in 2014 came to about 70 percent (69.7%) of the amount spent by official campaign organizations.

Table 1
Independent Expenditures as Percent of Campaign Expenditures, Senate and House of Representatives, 2004-2014

Year------------Senate-------------House of Representatives
2014-------------69.7-----------------------17.4
2012-------------44.1-----------------------21.4
2010-------------17.1-----------------------10.5
2008--------------4.2------------------------2.9
2006--------------2.0------------------------3.4
2004--------------1.9------------------------0.8
Source: Calculated from Campaign Finance Institute, Data, Tables 3-2, 3-5 and 3-14, www.cfinst.org

The growth of independent expenditures has further privileged an already privileged class of wealthy political donors. The fact is that a very small group of individuals dominate the funding of independent expenditures. A joint analysis by the Center for Responsive Politics and the Sunshine Foundation found that only 0.01 (one-one hundredth of one percent of the population; 31,973 individuals) contributed almost one-third (31.5%, $373 million) of the funds used for independent expenditures in 2014. (1) What this means is that the shape and content of the country's political process and resulting policies are more than ever in the hands of a tiny minority of the population.

What then is emerging in the United States is a hybrid political system. On one side stands the regulated political process, in which political contributions to candidates are limited. On the other side stands the unregulated independent sector. To a very large extent, this independent sector is populated by individuals who through the use of their wealth can corrupt or seem to corrupt politicians. Furthermore, it is growing in size and importance relative to the former.

All of this has created a real conundrum for advocates of a more equal political process. A democratic system requires both equality and free speech. Neither should be sacrificed in the name of the other. The problem is that limiting expenditures in the name of equality does in fact limit free speech. Moreover, setting an expenditure limit would be not only arbitrary but also ineffective. A determined rich person would be able to fund as many opinion outlets as he or she desires by simply endowing family and friends with the requisite funds. Achieving greater political equality by restricting campaign political spending has been rendered inoperative.

Instead of trying to restrict the independent side of the hybrid, what is needed to achieve greater political equality is a strengthening of candidacies. Office-seekers should be provided with enough resources so that rich individuals through their independent expenditures do not become the monopoly providers of political thought. In principle, this could be done by mobilizing a sufficient cadre of small donors. But the fact is that during the 2014 election cycle only 12 percent of Senate expenditures were secured from small donors (less than $200) and an even smaller percentage (7 percent) of House of Representative candidate funding came from such donors. A small donor option seems unlikely to succeed in countering the political power of wealth. (2)

That leaves public funding as the mechanism most likely to restore greater balance to the hybrid system. Providing such funding would not violate First Amendment principles. Rich people could spend as much as they like on political activity. But at the same time, providing public funds to candidates would allow individuals who are not rich to run for office. They could win elections despite the fact that their views do not conform to the elite's political agenda.

There would be no need for public funding to match the level of independent expenditures in order to provide the needed counter-weight. Nevertheless, this system would be expensive: independent expenditures stood at more than $500 million in 2014. Something on that order of magnitude or even more would be required. In a country as rich as this one, however, such a level would be easily manageable. The current level of discretionary spending in the federal budget currently stands at $1.11 trillion, more than half of which is spent on the defense budget. (3) The argument that the country cannot afford such a system is obviously untenable. We value national security and pay a steep price for it. If we also value a political system of equality we will have to pay for it as well.

(1) Peter Olsen-Philips, Russ Choma, Sarah Bryner and Doug Weber, "The Political One Percent of the One Percent in 2014: Mega Donors Fuel Rising Cost of Elections," opensecrets.org
(2) Campaign Finance Institute, Data, "Non-Party Independent Expenditure in House and Senate Elections, 1978-2013). http://www.cfinst.org
(3) "Discretionary Spending," Nationalpriorities.org