Public funding and democratic elections.

• Author: Briffault, Richard

Our existing federal campaign finance system--the product of Watergate Era legislation(1) and the Supreme Court's 1976 decision in Buckley v. Valeo(2)--is in a state of disarray. The system is no longer capable of accomplishing the goals pursued by Congress and embraced by the Court a quarter-century ago: full disclosure of the sources of campaign money; limitations on large contributions by individuals; prohibitions on the use of corporate and union treasury funds; and voluntary, partial public funding, with spending limits, in the Presidential election. Indeed, the current law may actually have negative consequences, with unindexed contribution limits encouraging evasion, driving up the burdens of fundraising, providing a major role for organized interest groups and bundlers, and placing a premium on the personal wealth of candidates.

More fundamentally, our system fails to take seriously the concerns that ought to be central to the campaign finance system of a democratic society. These include: (i) fair and vigorous competition among candidates; (ii) equality of voter influence on electoral outcomes; and (iii) recognition that the campaign finance system can affect the integrity of the political process. Instead, many of our elections are uncompetitive, with one candidate--typically the incumbent--wildly outspending the others. A tiny number of very wealthy individuals have enormous influence over the financing of election campaigns, and, ultimately, on the elections themselves. Large campaign donations and candidates' dependence on those donations for the funds necessary to fuel their campaigns provide major donors with opportunities for special access to elected officials. The campaign finance system, thus, raises troubling questions about the integrity of the government that makes and enforces our laws.

With the campaign finance system produced by the Federal Election Campaign Act(3) ("FECA") and Buckley on the verge of collapse, what direction should campaign finance law take? One school of thought, championed by Justice Clarence Thomas(4) and a diverse and growing group of legal scholars,(5) would say "go back," that is, deregulate. They would scrap FECA's prohibitions, restrictions, and contribution limitations, and preserve only some reporting and disclosure requirements. Deregulation would certainly have some benefits. It would eliminate the evasions, the end-run tactics, and the fine legal distinctions that make a mockery of the current campaign finance laws. By enabling candidates to obtain large contributions directly from wealthy individuals, deregulation would also ameliorate the burdens of the fundraising process, if only for those candidates favored by wealthy donors. Deregulation, however, would do nothing to promote competitive election contests; it would preserve, if not expand, the influence of large donors on election campaigns; and it would effectively ratify the influence of large donations over the political process.

A second approach, epitomized by the Shays-Meehan Bipartisan Campaign Reform bill which has now twice passed the House of Representatives,(6) would attempt to renew FECA by using the traditional techniques of contribution restrictions and disclosure to plug the holes created by soft money and so-called issue advocacy expenditures. Such a reform might be able to check special interest influence, but it would do nothing to provide challengers with the resources they need to conduct competitive campaigns and do little to promote political equality within the electoral process.(7)

A third approach is to go forward, build on the presidential public funding law and the growing experience with public funding in many states and localities, and create a system in which public funds are available for candidates for all federal elective offices. Public funding would do a better job than purely private funding in promoting competitive elections, mitigating the impact of inequalities of wealth on the electoral process, and reducing the influence of large campaign contributors on government. Better than reforms which are based solely on restricting campaign spending and are thereby subject to attack as limits on political speech, public funding provides new resources for electoral communications and, thus, actually promotes First Amendment values.(8) Public funding would also ameliorate the burden of fundraising that presses so hard on contemporary candidates.(9) Public funding is not a panacea for all the ills of our political life. Nevertheless, public funding would make the financing of election campaigns more consistent with our political values, and it would enhance the ability of elections to serve their crucial role in our system of democratic self-governance.

Part I provides a brief description of public funding. Part II makes a case for public funding in terms of the basic principles of democratic elections. Part III considers the most serious objection to public funding--that, whatever its appeal in theory, it is not workable in practice. Given the tight space restrictions that apply to these paired Articles, and the editors' desire that they focus on the basic principles at stake, I am not going to present a specific plan. Instead, I will suggest that public funding can be made to work if we take seriously the lessons from our experience with public funding so far, particularly the need to provide candidates with sufficient resources for their campaigns and to design a system that minimizes the regulatory burdens for participating candidates and enforcement agencies.

1. PUBLIC FUNDING: IN BRIEF

   As Professor Smith notes, "public financing" is a term with potentially multiple meanings.(10) It could encompass the abuse of the franking privilege by incumbent officeholders, tax breaks for donations to compaigns, requirements that broadcasters provide free air time to election candidates, or grants of public funds to candidates or political parties. By public funding, I mean a campaign finance system in which candidates or political parties receive cash grants for campaign purposes from the public treasury.(11)

   Although the dominant form of campaign finance in the United States is private funding--that is, the money for campaigns comes from private donors, such as individuals, private organizations, or the candidates themselves--public funding in the form of cash grants to candidates or parties has been used in presidential elections since 1976, and there are currently public funding systems in at least two dozen states and cities around the country. In these systems candidates qualify either by raising a threshold amount of money from a requisite minimum of donors, or by winning a party nomination. Candidates then receive either matching grants that reflect their ability to obtain small private donations, or, in the case of the presidential nominees, flat grants that are based on the electoral strength of the parties that nominated them. Most of these systems are quite limited in scale, either covering just a handful of offices--a number of state systems fund elections for governor only--or providing only a small fraction of the funds needed to finance a campaign.(12) Public funding is also widely used in foreign democracies, although in those countries funds are usually provided to political parties rather than candidates.(13)

   But public funding has supplied a significant portion of the funds available to candidates in the last six presidential elections, to candidates for both statewide and legislative office in Minnesota and Wisconsin, and to both executive and legislative candidates in New York City and Los Angeles. In the 1996 and 1998 elections, referendum voters in Arizona, Maine, and Massachusetts approved ballot propositions which would make most elections in those states substantially financed by publicly provided dollars.(14)

   Although there are many fully privately funded systems--such as the system for the election of members of Congress--there are not and probably cannot be any fully publicly funded systems. No candidate can be prohibited from using private funds, so a publicly funded candidate may have a privately funded opponent. Even if all candidates in a particular race do accept public funds, noncandidates--such as individuals, political committees, or others interested in the outcome of the election--are free to use private funds for election-related spending. Even candidates who receive public funds are unlikely to be fully publicly funded. As noted, most public funding systems require candidates to raise a threshold amount of private funds to begin with, and then use matching formulas to link the amount of public money a candidate receives to his or her ability to raise private funds. Public funding, thus, involves supplementing, not supplanting, the private funding system.(15)

   All existing systems for providing public funds to candidates require those who accept public funds to agree to accept limits on their campaign spending. For many critics of the existing campaign finance system, spending limits are part of the appeal of public funding. As a matter of constitutional doctrine, public funding is essential for spending limits. But spending limits are not essential to public funding, and many of the benefits of public funding in promoting competitive elections and reducing the role of private wealth could be secured without spending limits.(16) Nevertheless, public funding is in practice intertwined with spending limits. Any public funding plan likely to be adopted is also likely to provide for spending limits. So the case for public funding ought to assume that public funding will be conditioned on the acceptance of spending limits.

2. PUBLIC FUNDING AND THE BASIC PRINCIPLES OF DEMOCRATIC ELECTIONS

   Public funding is more consistent than either the current FECA system, a deregulated system, or the FECA system with some loopholes plugged by...