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More money, more problems. Even for the rich?
When the Supreme Court did the expected last week and struck down aggregate contribution limits in its ruling on McCutcheon v. FEC, the general consensus would be that the rich would be pleased and advocates for good government would feel exactly the opposite. While contribution limits to individual candidates and party committees would still apply, the wealthy would no longer be limited to only spending a relative pittance on federal candidates and party committees, and would instead have free reign to spend their lucre more widely in the hopes of influencing the political process.

Amazingly, however, the "big donor community" might actually be split regarding feelings to the McCutcheon decision. And while many of us could wish that rooting out corruption and a respect for honest governance would actually be a factor, the truth is far more a matter of economics.

Read more below the fold.

To begin with, a basic understanding of aggregate limits is in order. Prior to the McCutcheon ruling, donors were limited regarding how much they could give in total to candidates for federal office and to political party committees. According to the Federal Election Commission, the limits in place for the 2013-2014 election cycle were:

$48,600 in contributions to candidate committees; and
$74,600 in contributions to any other committees, of which no more than $48,600 of this amount may be given to committees that are not national party committees.
Cumulatively, then, the most a big donor could possibly give to federal candidates and political parties in this cycle is $123,200. With those limits removed, however, the amount of money that now be spread around is limited essentially only by the wealth of the donor.  The most obvious example here is that of federal candidates: Under current contribution limits, a donor would only be able to give the maximum legal donation of $2,600 to 18 federal candidates before hitting the aggregate limit; given the fact that the number of contested federal races is far higher than that even during a midterm cycle, the increase in influence for wealthy donors here is obvious. But perhaps even more significant is the elimination of aggregate limits on party committees: while the most obvious example is the newfound ability to give a maximum $32,400 donation to several different committees of national parties (DNC, DCCC and DSCC, for instance), the effect goes far beyond this. Before McCutcheon, donors were only allowed to donate a total of $10,000 cumulatively to state and local parties in any election cycle. With these aggregate limits stuck down, it will now be possible for a big donor to give maximum contributions to both a state party and various local and county parties in the hopes of influencing a particular race.

Preventing this sort of thing is why aggregate limits existed in the first place. After all, the ability of maximum contribution limits to impede undue influence by wealthy donors only goes so far when there are multiple committees available with which to influence the same race. But are all wealthy donors happy about this newfound potential for profligacy? They most certainly are not:

They have a point, insofar as it extends to the politically inclined über-rich already reshaping the campaign finance landscape through free-spending Super PACs. But most lobbyists -- especially those hired guns not attached to a corporate office or trade association -- have much more limited means. They consider opening their wallets for pols to be a cost of doing business, a necessary chore to ensure the access that keeps them employed. But they don't relish it. "I would be surprised if anyone on K Street was looking for ways to spend more campaign money," veteran Democratic lobbyist Paul Equale says. "And this decision clearly opens the door for that." Popular conceit envisions lobbyists as predators bullying lawmakers, but the coercion reverses during fundraising crunch times.
And previous to the McCutcheon ruling, the donors who were most pressured had an easy excuse to say no: "hey, I would, but I can't! I'm up against the federal aggregate limit!" But these excuses are no more, and donors are actually not happy. The Public Campaign Action Fund has collected a sample of negative reactions from the people that one would have expected to be pleased about the ruling. The universal upshot is that these wealthy donors have money, but not unlimited money; and while they now have legal ability to give more than $123,200 in a particular election cycle, they may not actually have the budget for it.
“Many times I find myself saying to candidates, ‘I am sorry but my client is federally maxed out. That excuse for these donors is gone, and some people aren’t going to be happy.”
Now, it's difficult to feel too sorry for people who have the wherewithal to spend more than most people's annual household income on political donations. But while we may think of the McCutcheon ruling as an issue that affects the one percent, it is actually more elitist than that. It takes an income of just under $400,000 to qualify among the top one percent, and people at this income level likely wouldn't dare contemplate spending nearly a sixth of their biennial income on reaching the aggregate limit for political donations in a given cycle. It's only when we reach the level of the top one tenth of one percent—an annual income level of $1.9 million, according to Forbes—that exceeding these aggregate limits becomes an easy thing to contemplate in terms of percentages.

In short, it's not perfectly accurate to think of the McCutcheon ruling in terms of the one percent against the world. Instead, the one percent might not be too pleased as a whole. But the last one tenth of that percent? They're the ones who will be able to take advantage of this ruling to rule our political system even more than they already do.

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Comment Preferences

  •  mo'money, mo'mofos (26+ / 0-)
    In short, it's not perfectly accurate to think of the McCutcheon ruling in terms of the one percent against the world. Instead, the one percent might not be too pleased as a whole. But the last one tenth of that percent? They're the ones who will be able to take advantage of this ruling to rule our political system even more than they already do.

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013 (@eState4Column5).

    by annieli on Sun Apr 13, 2014 at 10:34:01 AM PDT

  •  Just a few Malefactors of Great Wealth? (8+ / 0-)

    That's somewhat of a relief.

    2014 is HERE. Build up the Senate. Win back the House : 17 seats. Plus!

    by TRPChicago on Sun Apr 13, 2014 at 10:34:21 AM PDT

    •  if your wealth is increasing by the billions (13+ / 0-)

      annually, spending a few percentages of that yearly would seriously destroy the public's ability to use the wallet to compete.  Obama spent what 1 billion total in his run?
      if the Kochs are making 4 billion ea a year, then in a 4 year election cycle, if they together spent 10%, that's 800 million per year, or 3.2 billion over the 4 years.
      and they're just 2 of the whack job billionaires out there.

      •  8 Years Ago During the Dean Nomination (1+ / 0-)
        Recommended by:
        Barbara Marquardt

        I said on his blog that all this celebration of people power would necessarily be extremely short lived, because the ability of the top end to price-out we the people is essentially infinite.

        I couldn't foresee the specific steps but our system is obviously almost as pristine in its uncivilization as new fallen snow, in terms of its utter capitulation to warlords in the information and communication spheres. It's built that way from the bedrock up, in the most important senses the problem of how to establish a civilization has not even been imagined yet. The need to do it is largely unimagined here.

        We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

        by Gooserock on Sun Apr 13, 2014 at 11:33:28 AM PDT

        [ Parent ]

      •  It hasn't really worked for the Kochs (0+ / 0-)

        So far all they've managed to do for the most part is flush their money down the toilet.  Maybe there's been more impact on the local level, but on the Federal level they've have a very poor track record of success.  

        Their problem is they have the money to get their message out, but their message is inherently in opposition to most people's interests, so it's a very hard sell.  Unfortunately, for the Kochs not everyone is stupid and completely ignorant.  

    •  Here is where the real problem lies (5+ / 0-)

      It isn't just Americans of Great wealth who want influence with American politicians, International companies involved in international operations in search of oil, gas and coal, even governments looking for stability for their pipelines running through places like Afghanistan and the Ukraine may want US politicians to go to war with countries like Iraq, and Iran to preserve their profits and lack of regulation.

      When some small country like Libya or Algeria, Venezuela, Vietnam, Cambodia, Mexico, Canada, Ecuador, Columbia, Botswana, Rhodesia, the Balkans, Peru or Cuba  decides it wants a bigger share of the revenues from the oil or gas or other resources within its borders, we get calls for regime change, allegations that the merciless dictators we put in charge of some Banana republic to mercilessly dictate that the prices of bananas and energy  be stable, have turned out to be merciless dictators insisting on the control of the prices for sugar and coffee as well.

      I look at the plutocrats in Thailand, the Congo, Sri Lanka, and the Red States in this country and they all want more funds so they can hire mercenaries and drones and build swat teams to take down the occupy your streets with protests and calls for Democracy and an end to voter suppression branches of al Qaeda.

      The only way to really solve this problem is to make it illegal to have so much money you can bribe influence politicians elections and tax campaign contributions at something like their real cost to society.

      Live Free or Die --- Investigate, Incarcerate

      by rktect on Sun Apr 13, 2014 at 10:57:31 AM PDT

      [ Parent ]

    •  Paradox (0+ / 0-)

      The ultra-rich only make up only 0.1% of the population and not all of them make political contributions. So if this very small group of ultra-rich contributors are the only ones who will be able to make an impact, it’s possible that over time moderately wealthy contributors will drop out of the game. The end result may be that in the future the total amount of money spent on political contributions may decline significantly.

      "For all those whose cares have been our concern, the work goes on, the cause endures, the hope still lives and the dream shall never die." --Senator Ted Kennedy

      by Blue Silent Majority on Sun Apr 13, 2014 at 01:43:24 PM PDT

      [ Parent ]

      •  except that the ultra-rich make up far more than (0+ / 0-)

        10% of all the money in the top 1%. They can easily more than compensate for whatever was coming in from the bottom 9/10ths of the top 1%. heck, the 1000 wealthiest households in the country -- the top 0.001% -- can outspend everyone else, without even feeling it.

        this is what the top 5% or 1% have never grasped: that unleashing (via tax cuts) perpetual geometric increase in financial wealth will eventually price them out of the economic elite. they can't possibly keep up with the gazillionaires. within two decades, we're going to start seeing some trillionaires, and by the end of the century they'll be more common than current billionaires. this relative handful of individuals -- the top .001% -- are going to own pretty much everything on the planet. the mathematics are inevitable.

        To put the torture behind us is, inevitably, to put it in front of us.

        by UntimelyRippd on Sun Apr 13, 2014 at 06:10:26 PM PDT

        [ Parent ]

  •  So this means that Sheldon Adelson (5+ / 0-)

    and Donald Trump both get to / have to spend $17 gazillion in the GOP primaries fighting each other and go broke?

    What a pity.

  •  Without the ability to spend my billions on (1+ / 0-)
    Recommended by:
    commonmass

    the candidates of my choice?  The implication is that my ability to inherit or on my own make money and spend it as I wish.

    Take a minute.  

    Read it again.

    You progressive liberal types inherently know how to defuse that simplistic conservative bullshit.

    That is their game.  Don't stop abusing them in your retorts.

    Thanks!

    Someone once asked me why do you always insist on taking the hard road? and I replied why do you assume I see two roads?

    by funluvn1 on Sun Apr 13, 2014 at 10:41:12 AM PDT

  •  Aha! So the less ueber-rich are feeling (10+ / 0-)

    disenfranchised because the playing field is no longer equal: now the ueber-ueber rich can now hold all the cards.

    Why does the Supreme Court hate democracy?

    Pope Francis: the Thumb of Christ in the eyes of the Pharisees.

    by commonmass on Sun Apr 13, 2014 at 10:46:06 AM PDT

  •  Now I am by no means... (2+ / 0-)
    Recommended by:
    Amber6541, jjohnjj

    Now I am by no means smart enough to make sense of all this. But why can't we restrict "outside" money from influencing campaigns? US Senators and Reps primary funding source should be from party and constituents, not from lobbyists from K street.
    Just my opinion...

    "I think it's the duty of the comedian to find out where the line is drawn and cross it deliberately." -- George Carlin, Satirical Comic,(1937-2008)

    by Wynter on Sun Apr 13, 2014 at 10:55:22 AM PDT

    •  "If you can't vote for a candidate, you can't give (1+ / 0-)
      Recommended by:
      Keep It Simple

      money to that candidate". The formula could be just that simple.

      This would take unions out of the picture, as well as PACs, and it might leave state and local offices at the mercy of state and local oligarchs.

      But that's a chance I'm willing to take.  I think it's easier for local constituencies to figure out which candidate is backed by the local fatcats.

      And stats from the 2010 state campaigns indicate that self-funded candidates almost always lose. Despite spending more than a quarter-billion dollars combined, only three of the top 10 primarily self-funded candidates for state office nationwide actually won election.

      “It is useless to attempt to reason a man out of a thing
      he was never reasoned into” - Jonathan Swift

      by jjohnjj on Sun Apr 13, 2014 at 01:12:15 PM PDT

      [ Parent ]

  •  Whew! I'm glad that we (2+ / 0-)
    Recommended by:
    pickandshovel, IreGyre

    cleared this up.

    In short, it's not perfectly accurate to think of the McCutcheon ruling in terms of the one percent against the world. Instead, the one percent might not be too pleased as a whole. But the last one tenth of that percent? They're the ones who will be able to take advantage of this ruling to rule our political system even more than they already do.

    I really like to know how things shake out at .000000000X level, but the line in this diary will do.

    The banks have a stranglehold on the political process. Mike Whitney

    by dfarrah on Sun Apr 13, 2014 at 10:59:02 AM PDT

  •  The 1% was a good simple term for OWS... (0+ / 0-)

    but now that we are past that is is really too exclusive an untrue to use as a means to take us any farther. OWS had no solution anyway but it did an excellent job of highlighting the problem and that was the best it ever could do.

    As you point out the real issue is not the 1% and anyone making less than $1 mil a year, though very wealthy, is not so insanely rich they can heavily influence the system. Its the .1% or maybe even the .01% that control the type of wealth that gives them undue leverage.

    Its important we realize this because if any second movement were to form furthering the ideas of OWS, its going to have to be even more inclusive so not to push our allies in the 1% to feel they are seen as enemies and forced to back the real enemies.

    Join the DeRevolution: We are not trying to take the country, we are trying to take the country back. Get the money out of politics with public financed campaigns so 'Of the People, By the People and For the People' rings true again.

    by fToRrEeEsSt on Sun Apr 13, 2014 at 11:16:00 AM PDT

  •  "Oligarchy" means "rule by a few" (2+ / 0-)
    Recommended by:
    pickandshovel, atana

    The people in that six-figure income range may want to believe that their access is equal to that of the Kochs and Adelsons, but obviously it isn't -- maybe wasn't before, and certainly isn't now.

    Soon it will become blazingly obvious that our government is actually owned by a very small cadre of men (and I mean men), and everyone else is second-class.

    The only cause for optimism is the well-known phenomenon that when you close people off from one means of expression, such as voting and petitioning their public officials (or make those obviously futile), people tend to find other means of expression -- whether strikes, Occupies, street demonstrations, or whatever else they can think of.

    One reason voting rights and other forms of "mainstream" political participation opened up in the late 60s/early 70s was to try to tamp down the inner city (mostly) street riots that convulsed a number of cities. The anti-war movement had somewhat the same effect; stern conservatives often counselled "working through regular channels" such as elections, only to have it pointed out that people under 21 were not allowed to vote -- and that rule was then changed to 18. The reason we have the NLRB and Federal law regulating union elections is that in the 1930s and before, strikes often became violent (on both sides). I'm not an advocate of that type of protest, but it is what tends to happen when people see no other way to express their frustration and anger. And the Establishment often then concludes that it would be better to provide a more civilized channel for protest, such as voting.

  •  they will be outbid. they know there is (0+ / 0-)

    always a bigger fish hiding in the weeds.

  •  The ordinary rich need to join with the 99% (1+ / 0-)
    Recommended by:
    Mimikatz

    or they will just end up being owned by the truly, truly rich...
    like everyone else... and the problem is that the truly rich will be able to get one half of the ordinary rich to "pwn" the other half by getting the sellouts to see what side their bread is buttered on... plenty of ordinary rich will do as they are incentivized to do in order to keep what they have... divide and conquer

    It will be a US version of Putin's Russia... A billionaires playhouse like they have which US billionaires can only envy for now... that extra bit of control and looting. Putin he has an understanding with HIS billionaires and together they forced out or locked up the billionaires who did not play properly... or were overplaying their hands... and Putin's billionaires cut him in... or he cuts himself in and consequently is reportedly a modest billionaire himself... something normal politicians do not achieve unless they are a kleptocrat who far surpasses looters like the Marcoses and Mobutus and their ilk...

    If the Kochs et. al. complete their total scrapping and remodelling of the USA... constitution and all... sold willingly on a fearful and programmed population and imposed on the rest...   there will either be no term limits for presidents or they will be VPs during a puppet successor or they will both just be compliant employees of the plutocrats... and those Billionaires will anoint lackeys for all remaining government roles... it will be like casting Ronald for president only it will be the entire shell government... all staffed by compliant tools who graduated from approved right wing universities and groomed to help ensure that their sponsors' money gets the best loving care... and that the population is locked into a rentier economy with no voice but imagining that they do...

    some claim that this is what we have already... but there is actually some ways to go before the plastic smooth and acceptable corporate 1984 is fully implemented to the point that there was no easy way back and only an eventual complete collapse would allow a fresh but difficult re-start from a ravaged economy and political system...

    But there is still time to avoid all that..... the ordinary rich can be like collective FDRs and see that they have to join with the 99% who care and the odd billionaire who also wants to save some sort of democracy and a sustainable economy not periodically looted by the super rich or the soon to be new members of that micro class at the top...

    Pogo & Murphy's Law, every time. Also "Trust but verify" - St. Ronnie (hah...)

    by IreGyre on Sun Apr 13, 2014 at 03:34:13 PM PDT

  •  From TPM, via The Roosevelt Institute. (1+ / 0-)
    Recommended by:
    BMScott

    CHARTS: The Amazing Wealth Surge For The Top 0.1 Percent

    Breaking down the top 1%:
    1. The top .1% are vastly increasing their wealth, especially the top .01%. Most of this comes at the expense of the 99%.

    2. The bottom half of the 1% have not increased their share of the wealth in the last 40 years, and .5% to .1% have only made "modest" gains.

    The lower 90% of the 1% haven't yet been targeted by the 30,000 or so sociopaths at the top, but they haven't been invited to the party either.

    I haven't seen a better illustration of the development of oligarchy in the US than this one.

    ...if you plant ice you're gonna harvest wind. (RH/JG)

    by telebob1 on Sun Apr 13, 2014 at 09:33:52 PM PDT

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