Regulating Political Spending
In December 2003, the U.S. Supreme Court, in a 5–4 decision, upheld the major provisions of the Bipartisan Campaign Reform Act (BCRA). The Court upheld the act’s restrictions on so-called soft-money contributions to the national party organizations, as well as the act’s ban on the use of unregulated funds for issue advertising that mentions a candidate’s name within sixty days of a general election or thirty days of a primary election. The Court justified its decision on evidence that the electoral process was surrounded with the appearance of corruption and “the danger that officeholders will decide issues not on the merits or the desires of their constituencies but according to the wishes of those who have made large financial contributions valued by the officeholder.”
Supporters of BCRA argue that affluent individuals and special interests have for too long been dominant forces in the American political process. In the 1970s, Congress enacted the Federal Elections Campaign Act (FECA) to deal with the corrupt practices revealed during the Watergate inquiry. FECA limited the amounts of money that individuals and political action committees were allowed to contribute to candidates. In the wake of FECA, however, tens of millions of dollars in unregulated or “soft” money began to flow into the coffers of the national political parties. Though this money was ostensibly to be used for voter registration and party-building activities, much of it was spent to elect candidates, circumventing FECA restrictions. In addition, wealthy individuals and groups discovered that they could launch campaign efforts on behalf of candidates without being limited by FECA restrictions as long as their efforts were not coordinated with the candidates’ official campaigns. The intent of FECA had been to level the playing field and to prevent wealthy individuals and interests from essentially buying influence not available to ordinary voters. FECA clearly had failed. Thus, according to BCRA supporters, further reform was needed to restrict the use of soft money and to block deceptive issue advertising.
Critics of BCRA concede that money is a powerful force in the political process. They argue, however, that BCRA will be both ineffective and harmful. Critics note that BCRA is filled with loopholes. One loophole allows groups to raise and spend unlimited political funds as long as the groups are not formally affiliated with parties or candidates. BCRA proponents, of course, argue that loopholes can be dealt with as they come to light. They hope the law will be expanded and tightened over the years, perhaps leading to full public funding of election campaigns.
BCRA critics, however, assert that the law has fundamental defects that cannot be cured by further tinkering. First, say critics, BCRA interferes with free speech and political expression. In particular, BCRA restricts issue advertisements, which are funded by interest groups in an effort to put their favored issue on the agenda of voters. By limiting the use of these advertisements during election seasons, critics argue that BCRA keeps interest groups from raising issues at the time when voters are most likely to be paying attention to them. The Supreme Court agreed with this argument in its decision in Wisconsin Right to Life v. FEC, which has weakened regulation of issue ads (see Chapter 10).
In 2010 the Supreme Court found restrictions on campaign spending by corporations and unions to be unconstitutional. While repeated as part of BCRA, limits on corporate spending in campaigns have existed in the United States for almost a century. The Court held, in Citizens United v. Federal Election Commission, that the government may not ban political spending by corporations in candidate elections. The majority, five justices, argued that the First Amendment prohibits government from restricting any political speech, including that of associations of citizens and corporations. The four dissenters argued that allowing unlimited amounts of corporate money into politics would undermine democracy and that corporate speech is not the same as that of human beings.
Critics also see BCRA as undermining political parties by outlawing soft money while allowing “hard money” contributions directly to candidates. Third, critics claim that BCRA makes it more difficult for challengers to defeat incumbents. Challengers must raise and spend far more money than incumbents to have a chance to win a House or Senate seat. To the extent that it slows the flow of money into political contests, BCRA is characterized by its critics as “incumbent protection legislation.” Finally, critics charge that BCRA is one more step in the direction of full public funding of elections. Whereas most BCRA supporters view this as a positive feature, critics say that full public funding would give those in power too much control over the electoral process and would lead to a system in which competing parties would have less incentive to pay attention to public preferences, since their funding would come from the government.