Money & Politics News

WASHINGTON, D.C. – Higher contribution limits for federal candidates enacted by Congress in 2002 failed to deliver the promised benefits, according to a study released today by the U.S. Public Interest Research Group (U.S. PIRG) Education Fund. In 2004, winners raised $177 million more in large contributions than losers, despite new higher limits that many lawmakers predicted would even out campaign funding among all candidates. Overall, winners held a more than 3 to 1 fundraising advantage over their opponents. The advantage of wealthy candidates and those with access to wealthy donors skews election results, deters some potential candidates and reduces voter choices on Election Day according to the new study.

“While addressing the abuses of Jack Abramoff and his associates, we must also address the underlying problem of money in politics,” said U.S. PIRG’s Gary Kalman. “Talk in Congress of again raising contribution limits along with lobby reform is nothing less than shameful – a cold shoulder to concerns to the American people.”

The study, "Raising the Limits: A Bad Bet For Campaign Finance Reform", also found that despite a promising increase in the amount of small donations in the 2004 election -- up $146 million from 2000 -- the overall clout of small donors dropped slightly. Large contributions, those of $1,000 or more, increased by $345 million and the net result was that small donors accounted for less than they did in the previous presidential election.

“The evidence counters the misguided notion that higher contribution limits helps the little guy – the grassroots candidate who supposedly will be able raise more money to build name recognition and voter support.” said Adam Lioz, Democracy Advocate at USPIRG. “In fact, the research data suggest that higher limits make it more difficult for those without deep pockets to overcome the advantages of those with ties to wealthy special interests. In a high limits system, the benefits go to those who can raise insurmountable sums, deter potential challengers, and run in races that are effectively decided by money before a single vote is cast.”

The report also cites a disturbing trend toward fewer and fewer candidates running for office that continued unabated under the new rules. It appears that as the need to raise large campaign contributions to win increases, fewer individuals are choosing to run.

“In order for Americans to see reform work in their hometown elections, we need to fix some policies and pass others that will more readily engage voters in the process,” noted Kalman, “the current system does not do that well.” The report lists a number of measures that would create a system in which average Americans have a real opportunity to weigh in with meaningful contributions at the outset of campaigns, learn more about candidates during campaigns, and have real choices on election day. The recommendations include:

1. Lower contribution limits. Contribution limits for all candidates and all races should be set at a level that average Americans can afford. Given that only 0.05% of voting age Americans made a $2,000 contribution to a 2004 federal candidate, we should dramatically lower contribution limits.

2. Limit campaign spending. Elections should be contests of ideas, not battles for dollars. The use of personal wealth and large contributions in campaigns should be limited through mandatory spending caps so that no candidate has an unfair financial advantage.

3. Provide vouchers, tax refunds or credits for small political contributions. Vouchers, tax refunds or credits for small political contributions (up to $100) would encourage more small contributors to participate in the political process. This would magnify the voices of average Americans, enable candidates to run campaigns geared towards non-wealthy citizens, and provide a counterweight to the money flooding the process from large donors.

4. Provide candidates with a clean money option. Give candidates the option of forgoing all private contributions and receiving limited amounts of full public financing. We should start by providing full public financing for presidential elections and eventually extend this program to include congressional elections.

5. Provide free media for candidates. Free TV, radio, and mail should be provided to candidates. This would dramatically decrease the cost of campaigns and would provide an opportunity for those who are not favored by wealthy donors to get their messages out. The American public owns the airwaves, which are supposed to be operated “in the public interest,” so this requirement would not impinge upon the rights of commercial broadcasters.

6. Require in-district fundraising. Candidates should be required to raise all or most of their funds from the constituents they seek to represent. This will make representatives more accountable to their constituents and reduce the influence of outside interests.