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Beyond Sticker Shock: What's Really Changed in Money in Politics in 2012?

Beyond Sticker Shock: What's Really Changed in Money in Politics in 2012?

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Published by Roosevelt Institute
A research agenda for journalists, academics, and reformers. Written by Roosevelt Institute Senior Fellow Mark Schmitt. Published October 2, 2012.
A research agenda for journalists, academics, and reformers. Written by Roosevelt Institute Senior Fellow Mark Schmitt. Published October 2, 2012.

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A RESEARCH AGENDA FOR JOURNALISTS,ACADEMICS, AND REFORMERS
That the role of money in American politics has changedin recent years cannot be doubted.
Citizens United 
andother judicial decisions along the same line, theemergence of SuperPACs and 501(c)4 non-profits ascampaign vehicles, the disappearance of rules governingcoordination between campaigns and those groups, andthe final irrelevance of the presidential public financingsystem have combined to return us to a climate roughlylike that of the pre-Watergate era, when a few wealthyindividuals, or in some cases corporations, couldbankroll a candidate. The biggest di
ff 
erence betweenthe Nixon era and ours is that campaigns now cost 2,000percent more.There are some things we know about this newenvironment. We know that in an era of unprecedentedinequality of wealth and income, those who provide themeans for politicians to be heard represent not just the 1percent, but less than one-third of 1 percent: 0.026percent of the population gives $200 or more to anyfederal candidate, but provide two-thirds of all campaignfinancing. An even smaller share of the population“maxes out” or supports outside groups. Politicalinequality thus potentially reinforces economicinequality, in a dangerous and self-perpetuating cyclethat, as Princeton political scientist Martin Gilens'srecent book
A
 ffl
uence and Influence
shows, divertspublic policy from the public's views.We also know that when a single source supports acampaign with millions of dollars, it creates a dependentrelationship between an elected o
cial and the donor,which inevitably distorts decision-making – maybe just ali
le, maybe a lot.But there is more to the new world of money in politicsthan intimidating numbers and concerns aboutcorruption and dependency. To fully understand or
Beyond Sticker Shock: What’s ReallyChanged in Money in Politics in 2012?
Mark Schmi
Published: October 2nd, 2012
address the role of money in politics, we need tounderstand how money really works in politics, what itse
ff 
ects are, and what has changed in this cycle otherthan the top-line numbers. Here are some of thequestions to consider, especially as full data on thiselection comes in a
er November, looking at both what'shappened and its implications for policy:
HAS MONEY AFFECTED COMPETITION?
 
Money can a
ff 
ect political competition in two ways:through scarcity (when candidates don't have enoughmoney to compete) and through abundance (when somehave overwhelming amounts). In the current climate,money is hardly scarce on any side, and that has ane
ff 
ect on competition. During the GOP presidentialprimaries, SuperPAC money kept candidacies alive that,in the past, would have expired for lack of money. Whilethis created situations of total dependency forcandidates on a single donor, it also led to competitionthat was absent in past presidential primary ba
leswhere viable candidates ran out of money.Did the same occur at other levels? Were morecongressional candidates able to reach the threshold torun competitive races? Or did huge blasts of outsidespending wipe out potentially viable candidacies, inprimaries or the general election? One measure will be,how many non-incumbents are able to reach the basicthreshold for competitiveness?
DOES MONEY AFFECT POLARIZATION?
Many SuperPAC and other outside-money donors,especially those on the right, appear to be moreideologically focused than donors in the past, such asthe so
-money donors of the 1990s. And industries andcorporations that have traditionally spread their betsacross the parties appear from Center for ResponsivePolitics data (which includes employee contributions) tobe moving toward stronger partisan alliances in 2012.
About the Roosevelt Institute
The Roosevelt Institute is a nonprofit organization carrying forward the Roosevelt legacy and forging a New Deal for the21st century by developing innovative policy ideas, bold leadership, and a strategy to restore America’s promise ofopportunity for all.
 
For more information visit us atwww.rooseveltinstitute.orgor find us onFacebookandTwi
er.
Copyright 2012, the Roosevelt Institute. All rights reserved.
The views and opinions expressed in this paper are those of the author and do not necessarily represent the views of the Roosevelt Institute, its o
 ffi
cers, or its directors.
1
 
Finally, evidence shows that outside groups tend to runmore negative ads than candidates themselves,potentially locking the candidates into positions that aredi
cult to step back from. Is this money making partypositions more intractable, and thus exacerbating thestructural polarization of politics?
DO BROADCAST ADS MATTER AS MUCHAS THEY USED TO?
Radio and television advertising is still by far the largestcost in campaigns above the local level, and ads remainthe only way to reach voters who aren't firmlycommi
ed and who don't seek out political informationin newspapers or online. Reform e
ff 
orts, such as the“electioneering communications” provisions of BCRAthat were at issue in
Citizens United 
, have focusedprimarily on broadcast media – not only by bringing adsintended to influence the election into the regulatedzone, but also by ensuring a
ff 
ordable or free time forcandidates.As the share of the voting electorate that is genuinelywavering shrinks to an estimated 3 to 5 percent,especially for high-profile races such as the presidency,the emphasis shi
s to turnout and mobilization of thebase (or pu
ing obstacles, such as voter ID laws, in theway of turnout). The more consequential outside money,then, may involve not the be
er-known SuperPACs, butgroups involved in turnout and mobilization, or indiscouraging voting, such as the group called True theVote.
HAVE CORPORATIONS CHANGED THEIRBEHAVIOR?
The post-
Citizens United 
scenario in which largecorporations pour millions into e
ff 
orts to unseat somepoliticians and boost others has not come to pass. Witha few exceptions, and granted that we have limitedinformation on many spending vehicles, corporationsand especially publicly held corporations have not beenthe main contributors to SuperPACs. But havecorporations changed their behavior in other ways,perhaps more in response to the sense that “anythinggoes” rather than the specific legal changes broughtabout by
Citizens United 
? For example, have they used501c(4) vehicles to move more partisan funding, whilekeeping the veneer of bipartisanship in their disclosedfunding? Have they increased their communications withtheir own employees about politics, such as throughinternal websites – a trend that began in 2008?
ARE THERE DOWNSIDES TO SUPERPACSAND OTHER OUTSIDE-MONEY VEHICLES?
In the recent past, there were significant reasons forcampaigns to prefer to avoid moving money throughoutside organizations, since it meant giving up aconsiderable amount of control of their message. Butwith the de facto disappearance of rules aboutcoordination between campaigns and outsidecommi
ees (many SuperPACs are dedicated not to acause but to a candidate, and are controlled by longtimesta
ff 
ers to the candidate), there is no longer muchreason for candidates to avoid SuperPACs or otheroutside vehicles.But two downsides remain: Broadcast stations are freeto reject ads by outside groups that they consider falseor misleading, and, more importantly, outside groups donot receive the “lowest unit rate” guarantee. A recentProPublica report indicated that this second factor hadall but wiped out the Romney campaign's earlyfundraising advantage over President Obama'scampaign: Because more of Romney's ad buys werethrough outside groups, they were paying six times morefor the same advertising time.
DO SMALL DONORS STILL MATTER?
Beginning in 2004, and partly facilitated by the Internet,small donors became a more significant force in politicalcampaigns, and campaigns put more e
ff 
ort into seekingsmall donors. This made small-donor reforms, which relyless on limits and more on incentives for smallcontributions, a
ractive to many observers, notably thefour political scientists who authored the paper, “Reformin the Age of Networked Campaigns” in 2010; lawprofessor Spencer Overton in his recent article, “TheParticipation Interest”; and the congressional authors ofthe recently introduced Empowering Citizens Act.These reforms would use tax credits, matching funds,and other incentives, based on successful programs suchas New York City's matching system, to motivate smalldonors to give and encourage campaigns to go a
erthem. Designed well, such as in Minnesota's system of aninstantly refundable tax credit (now defunded,unfortunately), they can be, in e
ff 
ect, a voucher systemin which every citizen will have the ability to make asmall contribution and those contributions will ma
er.Recent evidence from the Campaign Finance Institutesuggests that even in an era of very big money, smalldonors do still ma
er – at least to the Obama campaign,which continued to get 34 percent of its support from
Copyright 2012, the Roosevelt Institute. All rights reserved.WWW.ROOSEVELTINSTITUTE.ORG
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