January 28, 2013
How Campaign Finance Reform Makes Congress Wealthier

But it’s not what you think …

So here’s the deal. Congress is filled with millionaires. Lots of them, And the new Congress is no exception: it’s packed with lots of millionaires.

At the same time, people running for office have to raise millions of dollars to have a credible chance of winning (assuming they’re not running in a safe district with no opposition). Two Congressional races near me cost over $6 and $8 million dollars, respectively, factoring in the SuperPAC money. (Neither was in an expensive media market.) That’s a lot of cash coming in.

Ipso facto, then: raising money might make one rich. Take the money you raise, put it in your pocket … millionaire status awaits!

Except that’s not really what happens. Ironically, the rise in the percentage of millionaires in Congress over the last 30 years is as much a function of the laws governing campaign finance in the US as of anything else.

Here’s the deal: under federal campaign finance law, candidates for federal office who raise money for their campaigns can only raise fairly small amounts of money at a time. Right now, individuals can give a candidate to federal office up to $2500 in the primary, and another $2500 in the general election. (This may sound like a lot to you, but a maximum $2500 contribution is .0003% of an $8,000,000 campaign.) The rules are different for SuperPACs, which is why they exist. But any individual contribution is small relative to the overall cost of a campaign.

The reason for this is simple: if the relative significance of any individual contribution is small, then the likelihood of it leading to political corruption is low. If I say “vote my way or I won’t give you $2500!,” you can laugh me off—you don’t need my money that badly. 

However, the small relative size of any individual contribution means that a candidate has to spend a huge amount of time raising money. (The SuperPACs may change this, but haven’t yet.) It’s an enormous drag on a candidate’s time. Indeed, once elected it’s an enormous drag on elected officials’ time: they spend a huge chunk of their time fundraising for their next election. If they’re a party leader, they also spend a lot of time fundraising for others in their party. It has become the most time-consuming thing elected officials do—even more than legislating.

The thing is, if you’re rich already, you can sidestep most federal campaign finance rules. If you don’t raise any money, but instead just spend your own, there really aren’t many limitations on what you can do. You can spend as much as you wish, rather than being limited by what you can raise. You don’t have to spend any time fundraising, eliminating a major hassle AND freeing up your time to go around shaking peoples’ hands and otherwise engaging in real electoral politics. 

In other words, since you don’t have to go around asking people to give you their money, you don’t have to do anywhere near the same kinds of things that non-wealthy candidates have to do to get themselves a serious chance of being elected.

Of course, rich candidates don’t always win. Neither does the best-financed candidate. But the simple fact is that it is easier to get elected to Congress today if you’re already rich than it is if you’re not. One reason for this is the way campaign finance law works. Thus a law passed (in 1974) to protect us from political corruption has also helped the rich get elected to the offices from which they pass laws eliminating the estate tax, reducing (or eliminating) taxes on capital gains and other income they earn, and the like.

Which lots of people think is corrupt.

Welcome to my favorite political topic: irony in politics. 

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November 22, 2011
Why I Don’t Care About the Silly Supercommittee

Much hay has been made over the last couple of days about the failure of the so-called Supercommittee to hash out a budget deal that would reduce the long-term US deficit by $1.2 trillion —that’s $1,200,000,000,000, just for reference’s sake—over a ten year period. And there surely should have been: faced with long-term problems, Congress did what it is best at—it fiddled as Rome, if not exactly burned, at least lit the kindling.

And I don’t care in the least, for several reasons.

  • It turns out that if Congress does nothing—and I mean NOTHING—and just lets the Bush tax cuts expire, and fails to adjust the earned income tax credit (which is a bad idea), and fails to adjust Medicare payments to make doctors and insurers happy—TRILLIONS of dollars will come out of the long-term deficit all on its own. Indeed, it will go down MORE than if the Supercommittee had worked.
  • It isn’t at all clear to me how, with interest rates on US Treasury bonds at 2% or lower, and unemployment at 9+ percent, cutting federal spending is a good idea. Indeed, at the rate the US is refinancing its old debt at new rates, interest payments on the US debt are actually going DOWN right now. It makes a hell of a lot more sense to borrow money when interest rates are low than it would be to wait until rates were higher.
  • THERE IS NO DEBT CRISIS. Seriously. While we certainly have long-term debt problems, the “crisis” that led to the formation of the Supercommittee was entirely artificial in nature: the tea party Republicans decided that they would not vote to authorize an increase in the debt ceiling unless the budget was cut for every dollar that the debt ceiling increased. They claimed that the markets would go crazy if they didn’t make this stand, and that interest rates would skyrocket as investors abandoned the US, thus necessitating their budget cuts. And what actually happened? Well, interest rates when down when the Euro threatened to collapse. We borrowed more money and the world did not fall apart. The “crisis” was political in nature, and opportunistic in impulse: no economic force drove the politics that led to the creation of the Supercommittee. It was the tea party’s ambition to gut social spending that made the Supercommittee both necessary and doomed.

Don’t get me wrong: we need to fix our budget problems. But we don’t need to fix them tomorrow. We need to be serious, thoughtful and responsible. We need to be willing to give up things we care about deeply.

The Supercommittee was none of these. It was a gimmick. Good riddance.

September 8, 2010
What if the Democrats Lose the House?

So it appears to be possible, if not profoundly likely, that the Democrats will lose control of the House of Representatives this Fall. They will surely lose a fair number of seats; 28 is the mean for off year elections. Thus all things being equal, the Democrats should expect to lose a few seats either side of 28 just because Obama isn’t running, thereby mobilizing voters he brought to the polls in 2008. Given that the Democrats are defending a number of seats in what were previously Republican or Republican-leaning districts, and given the continuing economic recession, they may well lose quite a few more. (Although, since Republicans are if anything even less popular than the Democrats, the bloodbath may not be total.) In any case, the notion of the Republicans regaining control of the House is somewhere between unlikely and plausible. It’s certainly much nearer than most Democrats wish it was.

So what? How or why does this matter? 

First, for the ardent Republicans out there, some bad news: Even retaking the House (or even the House and Senate, which is almost inconceivable) won’t bring Republicans the power to make the Bush tax cuts permanent, or repeal health care reform. Even if they could pass such bills, Obama would veto them, and there is no chance the Republicans will make the 2/3 majority necessary in both houses to overturn a presidential veto. 

Second, the Republicans have done such an effective job obstructing the Obama administration’s plans so far that it is not clear that coming to power would matter much. Many hundreds of Obama appointees to various federal offices are already held up in committee, subject to informal holds that have prevented their receiving a hearing. This is true for nominees to the courts as well. (Note that there’s nothing particularly new about this: Democrats held up Bush appointees; Republicans held up Clinton appointees … ad infinitum.) And given that the Republicans in the Senate have taken the “everything must pass by a 60 vote majority” approach to governance, it’s not like Obama is finding his path through the legislature easy. It won’t be much different under a Republican House—or even a House (or Senate) controlled by a smaller Democratic majority.

Rather, three things stand out as “prizes” for Republicans seeking to takeover the House. First is money. Money follows winners—which is why, despite their problems, the Democrats have raised more money this cycle than have Republicans. They’re in power, and they get the money. A Republican victory would likely shift this pattern.

The second is committee chairships. Committee chairs set agendas, manage budgets, and otherwise shape the way their committees work. Republican preferred bills and budgets would get precedence, potentially setting up numerous veto fights with the President.

Which sets up the third prize Republicans will win if they take back the House: investigations. Committee chairs can be expected to launch numerous investigations into the goings on in the Obama administration. At their best, these investigations can expose real corruption and malfeasance in an administration; at their worst, they are little more than partisan witch hunts aimed at distracting and undermining an administration. My guess is that following a Republican takeover of the House investigations will multiply like rabbits, chasing down holes whether there’s any real point or not.

Which will set up the presidential election of 2012. Which, after all, has already started!