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02/20/2004

Does McCain-Feingold Help (Or Not Hurt) Democrats?

Here's a working link to Wednesday's provocative story in the Wall Street Journal, "McCain-Feingold Helps Democrats Stay Competitive"

Campaign finance regulation is always the realm of unintended consequences, some of which are good and some bad. The Journal's John Harwood points out two ways the law has, contrary to assumptions, helped Democrats this year. The first is the "stand by your ad" provision, requiring candidates to appear in their ads if only long enough to state briefly that they have approved the contents of the ad. That prevents the kind of hit-and-run attack ads that might backfire on a candidate if he or she were personally associated with them, and it is credited with the fact that the primary campaign has been almost entirely free of negative ads, with the exception of the anti-Dean ads aired by an independent group.

The "stand by your ad" provision (which, by the way, might well be found unconstitutional if challenged, since it regulates the content of a broadcast communication with the intent reducing negative advertising, rather than the "time, place and manner" of speech) wasn't particularly controversial, or considered an important part of the legislation. But it's often the little overlooked things in campaign finance regulation seem to matter most. In Arizona, for example, which has a system of full public financing for state elections, it's not the public money, but the system of qualifying for public financing -- by collecting a certain number of $5 contributions, to show broad support -- that captured the imagination of the public and politicians. The state commission that runs the program created a bolo-tie, cowboy-hat-wearing cartoon character called "Five-Dollar Bill" to promote the program, and the current governor, Janet Napolitano, boasts of throwing "five dollar parties" throughout the state.

More importantly, Harwood argues that the ban on soft money forced the Democrats to adapt by developing a small donor base, which had fallen far behind the Republicans. Indeed, it appears that the Democratic party committees have raised more in hard money (that is, contributions under the $2,000 limit, from individuals, which can be used for anything) than they had raised at this point in the previous election cycle in hard money and soft money combined.

The invaluable Professor Rick Hasen, who writes the Election Law blog dissented, noting that Republicans, with the now-$200 million raised by Bush still have a huge advantage that the Democrats can no longer use soft money to offset. Hasen also cites Nate Persily, another brilliant young academic in this field as arguing that "if raising small donations was really advantageous to the Democrats, they would have done more of it while raising soft money was still legal."

In a separate listserv, Tom Mann of the Brookings Institution argued in response that "Democrats got lazy going after soft dollars in large denominations. The new law forced their hand. The chairman of the DNC has said as much. And Howard Dean has led the way. The Democratic presidential candidates have raised collectively as much money as Bush has. The Democratic party committees are doing very well in their hard-money raising and especially with cash on hand. The national Democratic party committees are likely to invest more in GOTV in this cycle than they did in the 2000 cycle. And on and on."

Mann and Harwood are right here. Political fundraising operations have a culture. Either they go after big dollars (easy), or small dollars (usually more difficult). People who know how to schmooze big donors and walk out with $50,000 checks are very different from the people who know how to set up an operation that finds small donors and cultivates ever-expanding numbers of them. (Not that $2,000 is so small, by my standards, but it still takes a lot of them to finance a presidential campaign.) The Democratic fundraising operation was always based on cultivating large donors, sometimes ideologically motivated donors but often business donors who were persuaded that the Democrats were always going to control the House of Representatives or the Presidency, and so they had to hedge their bets. This wasn't always the best money to have, because it came with strings, and it was unreliable -- lose power and the money goes with it. The Republicans, in years out of power, had built a more reliable base of small and ideological donors, on top of which Bush added an unprecedented system for bundling contributions through business leaders.

The Democrats' escape from dependence on large contributions and soft money will certainly have its benefits. McCain-Feingold obviously forced the issue, but so did the fact of being out of power; the unifying and energizing presence of Bush, which has given Democrats a feeling that they have a stake in being DEMOCRATS that was missing in much of the Clinton era; and the fact that the internet can dramatically reduce the transaction costs of asking for a small contribution and all but eliminate the costs of asking for a repeat contribution. Dean didn't invent this, but he did show the way, and other candidates, and the party itself, will follow.

Posted by on 02/20/2004 at 04:24 PM in Current Affairs, Decembrist archives |

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Marsman

Mark,

A terrific post. I only recently discovered your blog, and have been coming by with some regularity. Only wish you posted a bit more often ... but not everybody can be as productive as, say, Calpundit. (Look at me: a professional writer, and I'm way too intimidated by the whole thing to start my own blog just yet!).

I hope you are right in all of this. The McCain-Feingold bill had seemed to me to be a tire necklace for the Democrats, given the ease with which Bush and his cronies raised so much money. But my specialty for years has been writing direct mail fundraising letters (mostly for progressive and environmental non-profits), and what has always struck me was how thoroughly worthless most -- not all, but most -- direct mail from political campaigns really is.

The problem is, generally, a compulsive need to be "politic." If you get creative, if you try to sound like a real human being talking to another real human being, if you go ahead and say what you REALLY think about the opposition's slimeball policies ... oh, they have a hissy fit and edit it all out. I've written precious few packages for political campaigns (some for Ann Richards, some for Hillary Clinton, and that's all), but I quickly learned to censor myself rather than listen to the consultants who'd hired me whine about what I was giving them. And even at that, the campaigns watered it all down even more!

I noticed that the Dean campaign, by contrast, came out swinging all the way. And their internet-base stuff was remarkably casual. I think it made a huge difference. And I suspect that since the spigot has been closed on big donor giving -- and, as you so correctly note, the fundraising cultures must change -- they are ALL learning to be a bit more aggressive and upfront in what they send to donors and potential donors.

Thanks again for your encouraging post.

-- Roger Keeling

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