Last Monday, the Supreme Court declined to hear a case challenging the century-old ban on direct corporate contributions to federal election campaigns. That counts as good news in a month that included the Court's earlier decision to hear a case that challenges the aggregate contribution limits in campaign finance, and in which Obama strategist David Axelrod declared via Twitter that he would prefer a system of unlimited contributions with full disclosure. Almost all Republicans, the Supreme Court, and a powerful faction of the Democratic Party now fall somewhere on the spectrum between skeptical and vehemently opposed to the legal regime of limits on contributions. The flimsy remains of the post-Watergate system of campaign finance regulation are on the verge of collapse.
Richard Hasen, law professor and proprietor of the indispensable Election Law Blog, argued in Slate last week that there was still hope for campaign finance reform – after Justice Antonin Scalia leaves the Court. Hasen is right, of course, that until at least one of the five members of the Citizens United majority leaves the Court by death or retirement, and is replaced by a Democratic appointee, the best hope for the Court is that it will rule narrowly in cases such as the one involving aggregate contribution limits, rather than using them as opportunities, as they did in Citizens United, to punch holes in the law that are bigger than the cases themselves. He's also right that expecting a constitutional amendment to overturn Citizens United (or do various other things, depending on the version) is far less likely than a change in the membership of the Court to reopen the path toward reasonable balance of the role of money in politics.
Hasen proposes that campaign finance reform advocates take the time now "to plan for the next Supreme Court." We should use the indefinite waiting period to "think more about what a reasonable campaign finance regime would look like" and acknowledge that "conservatives are absolutely right that campaign finance laws can boost incumbents and stifle political competition."
I agree with Hasen on all of that, even the last points, but I'd go even further: A reasonable campaign finance regime, one that doesn't boost incumbents or stifle competition could even be put in place with the existing Supreme Court. (The current Congress is another story.) The thinking he's proposing is going on right now, and is even being tested, in systems based on the principle of "small-donor public financing." These systems, which are not theoretical, use some combination of matching funds, tax credits, vouchers or generous public financing to candidates who show a base of small-donor support in order to make it easier for candidates to run who don't have big-donor support, in order to enhance public participation, and to ensure that elected officials aren't entirely dependent on big donors or corporations, whether those donors are giving directly to campaigns or to outside groups.
The public financing systems in Arizona, Maine, and Connecticut, which have been resilient, strongly supported by the public, upheld in the courts, and used by almost as many Republicans as Democrats, fall into this category. So does the generous matching system in New York City, which is a model for legislation that has the support of Governor Andrew Cuomo and a growing number of legislators. So does Minnesota's system, which is currently unfunded but which until a few years ago offered a quickly refundable tax credit for small contributions, along with a match on the candidate side. All those systems can be considered part of a broad experiment, and scholars are looking closely at them to see whether they change who runs for office, who donates, and ultimately, whether the states' political processes are more responsive to the public.
Legislation at the federal level follows the small-donor model as well. Rep. John Sarbanes' Grassroots Democracy Act, for example, draws on elements from several of the successful state programs, including a refundable tax credit for small donors, along with a matching program for campaigns. The Fair Elections Act similarly incorporates a combination of small donor incentives with full public financing. The idea of a voucher that would allow every citizen to contribute in the same way that she votes, long advocated by Yale Law Professor Bruce Ackerman, who calls them "Patriot Dollars," and more recently by his Harvard counterpart Lawrence Lessig, is attracting renewed interest as well. "The Participation Interest,"
All these systems are voluntary, and by themselves, they don't make much of an effort to control big money, except for candidates who participate. But they do make it possible for candidates to run who wouldn't be able to otherwise, or who want to run independently of big money. If they're designed well, they can help candidates get to the position where they can get their message out, and at a certain point, it doesn't matter all that much if the other candidate has a lot more money, or more outside money spent on her behalf. (The Brennan Center put out an excellent report in 2011 on the many positive effects of small-donor public financing.)
The big question is whether these systems can work without limits on outside money. Without limits, candidates might hesitate to participate, voluntarily limiting their own spending, if they worry about being overwhelmed by big outside campaigns, and it's unlikely that the public will long support throwing good money into a cesspool of unregulated spending. If that's the case, these systems will need backup from the kind of limits that are under challenge in the recent cases or rejected by the Court in Citizens United or other cases. But even after the Court rejected a feature of the Arizona system that gave candidates more money if they were attacked by outside money, the system survived, and a majority of candidates for statewide office in 2010 and 2012 participated in the system.
The 2012 federal elections offered even more evidence that small-donor systems can work. It was not that "money doesn't matter" (a view challenged by Roosevelt Institute fellow Thomas Ferguson and colleagues here), but rather that once a candidate for the House or Senate, or lower office, has reached a certain threshold, enough to allow them to be heard, extra money on the other side, whether from outside groups or the opposing campaign itself, matters less. For example, all the Senate candidates hit with outside spending by the Sheldon Adelson and Koch Brothers-funded groups won reelection. If small-donor public financing can get candidates to that threshold, then limits on outside spending won't be as important to making the system work.
That's not to say that it isn't worth trying to strengthen the limits that remain, and to build on the broader consensus that supports disclosure. In particular, the Internal Revenue Service should enforce the law governing 501(c)(4) non-profits, which are increasingly being used as vehicles for undisclosed and unlimited campaign spending, but which are not permitted to have influencing elections as their "primary activity." But compounding the Supreme Court's skepticism about limits on outside spending, the sheer number of mechanisms by which a donor can try to influence the outcome of an election has proliferated so far beyond the old standby of broadcast advertising that it will be impossible to chase it all down.
The next generation of campaign finance reform doesn't have to be developed just in a laboratory, while waiting for Scalia or one of his colleagues to retire or to encounter a higher judge. It's being designed, refined, tested and improved as you read this, in a half dozen states and municipalities. If it works, it will lead us to a system that will moderate the influence of economic inequality on democracy while enhancing competition and strengthening First Amendment rights of free expression.