The Principle of Campaign Finance Reform

Big Ten Democrat, whom I greatly like and respect, says Barack Obama should opt out of public financing, and that he should do it now, while it is still early. Strategically, Big Tent is absolutely right. As he says, should Obama opt out now, while his opponent is Hillary Clinton, the corporate media won’t question it. Should he win the nomination, and only opt out once his opponent is John McCain, the corporate media will eviscerate him. The free pass they give him against Hillary Clinton, whom they have always despised, and cherish the thought of defeating, if not destroying, will not transfer to a runoff against St. Maverick; and it won’t matter that the Saint is utterly and completely full of shit. But I strongly disagree with the fundamental premise of Big Tent’s argument:

Unlike most good government types, I believe that until there is full public financing of political campaigns, the Democratic Party should NEVER give away an advantage when it has one.

If John McCain accepts public financing for his general election campaign, and the Democratic nominee does not, the Democratic Party will lose the moral high ground, and much credibility, on campaign finance reform. That McCain is a liar and a hypocrite won’t matter. What will matter is that the Democratic nominee will be opting out, while the Republican nominee won’t be. Many are saying we should not cede the financial lead, now that the internet and a cratering Republican Party have handed it to us, but accepting that argument would only prove that campaign finance reform was always about the politics of being financially behind, rather than about the principle of creating a politics of people. Big Tent’s ideal of full public financing will never come to be because campaign finance reform will be, effectively, dead.

As I’ve previously pointed out, John Edwards had less than half as much campaign money as did Hillary Clinton and Barack Obama; and the rest of the candidates had much much less. Similarly, it’s no coincidence that Obama’s emergence as the clear Democratic frontrunner came as he vastly outspent Clinton, after Super Tuesday; and as they court the increasingly important Superdelegates, he has given more than three times as much money as has Clinton to those Superdelegates who are elected officials. Forget debates, speeches, policy statements, and stands on the issues, the Democratic nomination is being determined by nothing other than money.

Some claim that the internet has so changed the game, and so enabled people to participate, that it’s really a question of the other campaigns better resonating with the people. Obama supporters, in particular, point to his donors averaging some $250 or so, which sounds very nice. Unless you actually consider the national poverty rate, the more than 35 million people who live under it, and the 38 million who are food insecure. The poor cannot afford $250 donations. Those on strictly fixed incomes cannot afford $250 donations. We Democrats talk about the elderly who have to decide between needed medicines and food, well how many of them can afford $250 campaign donations? And who was the candidate who spoke most often, most passionately, and in greatest detail about poverty in America? More than a tenth of our population lives in poverty, but how high a priority will they be to candidates who depend on campaign donations that average hundreds of dollars?

The most common argument in favor of the Democratic nominee opting out of public financing relates to the Democrats’ extraordinary ability to raise huge sums of money over the internet. This is supposed to prove that the Democrats are more pure, their money more clean, and their susceptibility to favoring pernicious private interests over the common good diminished. Let’s look at some facts:

As Public Citizen’s White House for Sale website explains:

Bundling describes the activity of fundraisers who pool a large number of campaign contributions from political action committees (PACs) and individuals. Bundlers, who are often corporate CEOs, lobbyists, hedge fund managers or independently wealthy people, are able to funnel far more money to campaigns than they could personally give under campaign finance laws.

While there are disclosure requirements for bundling, they only go into effect when a bundler personally hands over checks. Most campaigns get around the disclosure provision by not having the bundler ever touch the checks. Mandatory disclosure of all bundled contributions – regardless of whether the bundler touches them – is the very least we can do to address this new way to evade disclosure laws. Disclosure of bundling activity could be achieved either through a new law from Congress or by an improvement in FEC regulations.

And for all the talk about the Democrats being able to raise tens of millions of dollars from regular folks, via the internet:

Hillary Clinton has 322 campaign bundlers, 19 of whom are lobbyists, and from whom she has raised a total of $104,571,988.

Barack  Obama has 359 bundlers, 10 of whom are lobbyists, and from whom he has raised a total of $101,429,497.

John McCain has 468 bundlers, 59 of whom are lobbyists, and from whom he has raised a total of $37,036,050; and I’m going to make a wild guess that if he opts out of public financing, those 468 bundlers are going to produce much larger numbers for McCain, in the coming months.

But even more disturbing, for any idealistic Democrat, is the way special interest money seems to be influencing the candidates’ policy positions. I’ll give but a few examples:

Clinton and Obama have each raised millions of dollars from the health care industry, which may be why nyceve recently wrote:

I want to tell you my good friends, if you care about healthcare, if you’re uninsured (that’s 47 million of us), or underinsured, (that’s the rest of us), less cheerleading and more holding their feet to the fire is in order.

I’m sorry to be the bearer of bad news, and  you may already know this, but neither health plan is great. Truth be told, they stink.

Clinton and Obama have each raised millions of dollars from the banking firms involved in the sub-prime disaster, which may have something to do with the bad news in this interview of The American Prospect‘s Robert Kuttner and The Nation‘s Max Fraser, by Juan Gonzalez and Amy Goodman of Democracy Now!

JUAN GONZALEZ: Could you outline the differences between-the major differences between the candidates? And it would be instructive also to talk about John Edwards’s policies, as well.

MAX FRASER: Sure. Well, when he was in the race, Edwards’s plan was by far the most comprehensive and aggressive, insofar as it really committed the government to intervening on behalf of homeowners and resolving the crisis in such a way that it would keep people from losing their homes. Edwards called for a mandatory moratorium on foreclosures, a freeze on rising interest rates, a real kind of redoubled efforts to not only regulate the mortgage markets, but financial markets generally.

Clinton and Obama fall short of that, and Obama falls short most significantly. He is the only one of the three who hasn’t called for a moratorium on foreclosures or a freeze on interest rates, which really are the most effective short-term measures that can be taken to keep homeowners in their homes. And beyond that, his plan calls for the least aggressive government intervention, the most limited spending to bail out homeowners and to especially borrowers who are at risk of defaulting on their mortgages and to help them restructure their loans in such a way that they’re affordable moving forward. And his plan actually really most relies on a pretty insignificant tax credit, which comes out to about $500 on average for homeowners, which might make a difference for those who are just barely falling behind, but not for those who are falling further and further behind.

AMY GOODMAN: Max, in your piece, “Subprime Obama,” you talk about his three main economic advisers.

MAX FRASER: Right.

AMY GOODMAN: Tell us who they are.

MAX FRASER: Well, there are these three young economists: David Cutler, Jeffrey Liebman and Austan Goolsbee. Cutler and Liebman are Harvard economists who hail from the Clinton administration. Goolsbee, who does the lion’s share of the work on this issue, comes from the University of Chicago. They’re all centrist market economists, I mean, what you would call them Clintonian in their politics, and that’s really where they’re coming from. They are oriented towards, you know, market-based solutions to social welfare issues. Cutler writes about incentivizing the healthcare industry as a way to improving care. Liebman has endorsed the partial privatization of Social Security. And Goolsbee also is one of the kind of market faithful.

JUAN GONZALEZ: Yeah, I’d like to ask you about Liebman in particular, because I think that, from what I understand, he is proposing a-has proposed for a 20 percent increase in the Social Security payroll tax to, in essence, create private accounts for all Americans. It would be like the equivalent of dues check-off for Wall Street.

MAX FRASER: Yeah.

JUAN GONZALEZ: It would be an enormous windfall for the Wall Street firms to be able to get that kind of a operation.

MAX FRASER: Right.

JUAN GONZALEZ: But it’s not clear-Obama has never said anything about this in the campaign trail, but his key adviser is known as the main proponent of this, right?

MAX FRASER: Well, one of the-a proponent of it, that’s right, entirely true. And, you know, Obama, I think what he says on the campaign trail on various issues of domestic policy are, you know, not wholly in line with where these policy advisers are, but they clearly are animating where he stands on these issues, like Social Security and the housing crisis, most notably, I think.

AMY GOODMAN: Robert Kuttner, can you weigh in here with these three economists that Max writes about in The Nation magazine, their significance, and especially on this issue of privatization of Social Security?

ROBERT KUTTNER: Well, it’s very distressing. I mean, I think it was National Journal, recently came out with a rating that showed that Obama has the most left-of-center record, voting record, in the Senate. And yet, the advisers that he relies upon are-I would call them center-right. They’re basically free-market guys who want to use markets to somehow solve social problems, which is like squaring a circle. And I was just at a board meeting of the Economic Policy Institute, which is, you know, the most effective left-of-center think tank in Washington. Except at the staff level, he is not reaching out to progressive economists. It’s a fairly narrow circle.

Same, of course, with Hillary. If anything, Hillary’s advisers are a shade more open to reaching out a little further left. And you worry that as attractive as Obama is, as inspirational as he obviously is, he might be very centrist as president, and you wonder whether this is him trying to be the Democratic version of John McCain, trying to tone it way down in order to reach out to independents, or whether this is what the man really believes, or whether he’s still a work in progress.

Obama and Clinton are the two leading recipients of campaign donations from the nuclear energy industry. Obama has already demonstrated that he will sacrifice the common good to the benefit of his nuclear industry donors, and as Beyond Nuclear‘s Paul Gunter explained, in that same Democracy Now! interview:

PAUL GUNTER: Well, both Senators Obama and Clinton have basically displayed a lot of indecisiveness about all the concerns with nuclear power-its cost, the inherent dangers, the unsolved nuclear waste issue, the proliferations issue. But I think that what’s most notable about that clip is the evasiveness, the indecisiveness, that the campaigns have taken. And it’s also been reflected in legislation with both Senators Obama and Clinton.

One of the main concerns is that both Clinton and Obama have very strong backing, financial backing, from the major CEOs from the nuclear industry. For Senator Obama, the chief executive officer, John Rowe, with Exelon Nuclear, Chicago-based, largest nuclear utility in the country; and Senator Clinton has strong financial backing from David Crane, who’s the CEO for NRG Energy, which is based in New Jersey. Both Exelon and NRG right now have got applications before the US Nuclear Regulatory Commission to build new nuclear power stations in Texas. So it’s disturbing that both Senators Obama and Clinton left out nuclear in their Utah speech, but we’ve seen that basically this kind of indecisiveness, you know, being all over the board indicates that influence-peddling with the nuclear power industry is alive and well on Capitol Hill and in these presidential campaigns.

And is it but a coincidence that because it has no major financial or lobbying power, one of the most promising new, renewable energy resources gets nary a mention on the campaign trail?

Now, of course, John McCain is simply terrible on health care, inscrutable on the subprime disaster, and an unapologetic fan of nuclear power; and, beyond that, of course, he’s simply sinister and deranged. But this is not about Democrats being better than John McCain, it’s about Democrats being right! Does anyone truly believe that the fundraising prowess of the Democratic frontrunners is significantly better or cleaner or more beneficial to the public than was that of the Republicans? Does anyone truly believe that “experience” and “hope” are immune to money’s corruptive power? The evidence clearly suggests otherwise. As Senator Russ Feingold has written:

Because it costs so much to run for office, interests with big money to contribute to candidates or spend on ad campaigns are able to get special access in Congress. Campaign finance laws on the books are supposed to limit the power of wealthy interests, but the search for ever-increasing sums of money to finance campaigns has led politicians and both parties to stretch the rules and create new loopholes – not to mention promoting legislation that serves wealthy interests rather than ordinary Americans.

If the Democrats do not stand on principle, when they have the financial advantage, they will never again have the credibility to promote campaign finance reform. Rather, they will continue to be as addicted to the same big money from the same special interests that have been poisoning our politics and destroying our government. They will continue to pursue safe, unthreatening incrementalist policies rather than aggressively pursuing the bold transformations that are required. And when the political wheel turns again, and the Republicans, with their much more accommodating approach to big money special interests, regain the financial upper hand, the Democrats will be locked out. Campaign finance reform will be dead. If, on the other hand, the Democratic nominee wins with public financing, when he or she could have spent much more, with a much greater financial advantage, by opting out, the possibility of selling and enacting full public financing will never be greater. That Democratic president would be uniquely positioned to truly transform our political system, and would be ready on day one to create change we can all believe in. And from such principled leadership, the Democratic Party, the nation, and the entire world will benefit.