John Oliver did a great job explaining how Congressional campaigns are funded during his HBO program on April 3,
but he left out a few crucial things.
There is perhaps no better way to understand why our government does or does not work than to understand campaign finance. Congressional fundraising is at the center of it all. Candidates need lots of money, therefore candidates need to raise lots of money. If candidates don’t raise a lot of money, they will lose. Or, if they aren’t personally at risk of losing, they still need to spend lots of time raising money to pay huge dues to the party. All of this is treated as fact. This is where the discussion often ends and where it did for John Oliver. There might be a legislative solution but it has no chance to pass. We are stuck.
What this obscures, however, are absolutely crucial questions about the process. How is the money raised? How is it spent? Is it spent efficiently? Does the spending actually produce better election outcomes? This is a complex subject but the place to start is the Call-Center at the Democratic Congressional Campaign Committee {DCCC). This is the committee that is charged with electing Democrats to the House and focuses primarily on re-electing Democrats. Since the 2006 election cycle, it has done an excellent job of fundraising. In these five elections, the DCCC has raised over $867 million, which is about $136 million more than its counterparts on the otherwise of the aisle. In 2014, the DCCC outraised the Republicans by $53 million despite being in the minority — something no one thought it could do. Despite that fundraising success, Democrats still lost a large number of seats. Money did not appear to be the problem.
For those in the most competitive races, the pressure to raise money has sky-rocketed. But the vast majority of members of Congress are in seats so safe that the pressure to raise money is mostly imagined. John Oliver mentioned the dues members in safe districts must pay to the party, but those dues are a fraction of what a member of Congress raises simply by being a member of Congress. In 2014, incumbent Democrats, who faced no real electoral challenge in seats it would be exceptionally difficult for them or any Democrat to lose, raised nearly $80 million from political action committees primarily representing business or ideological interests. It takes some work to raise this money, but not much. To a large degree the money simply falls into the laps of members who everyone knows will be re-elected. These members of Congress only paid $22.5 million in dues to the DCCC. Simply by taking the PAC money that is given them, Democrats in these seats could very likely be re-elected every year and meet their dues obligation without picking up the phone once or hosting a single fundraiser.
Besides the sheer numbers, there is something else unsettling about the DCCC approach. The dues paid into the DCCC come in the form of hard dollars that campaigns can use to qualify for reduced television ad times. Once the dues arrive at the DCCC, they are converted into soft dollars that do not qualify for these reductions and are thereby worth less. This is not only true of dues, it is also true of the money the DCCC raises through e-mail, which decreases the value of any small dollar donation by losing the ability to take advantage of the lower advertising rates. In 2012, the DCCC raised $49 million from small donors, or more than 25% of their total money raised, so this was not a trivial amount.
The DCCC justifies pooling money this way in the name of flexibility. By pooling its money, the DCCC can spend more on a late surge of advertising in September and October of the election year. At that point, it will have a better idea how all the races are going, who needs money, who deserves money. This was a better argument in the olden days when the playing field was bigger, when more seats were at stake. Now we already know what seats are likely to be available; flexibility seems more like an excuse not to fight in tough races.
The desire to centralize control in Washington and to fund the Congressional campaigns indirectly limits the kind of people who run for Congress. Because small donors are funneled not to individual campaigns but to the DCCC in Washington, there is no seed money from national sources for campaigns. This means individual campaigns have to start with larger amounts of money. A campaign proves itself via large fundraising, which only certain types of candidates manage. The irony is that the money that is already being raised is enough to fund the 50 or so challengers who would be needed each cycle.
The begging rooms exist only because of DCCC’s desire to retain control, and the lack of desire on the party of `campaign haves’ to share as much as they reasonably can with the campaign ‘have nots.’ Already, as we saw, small donors funded about a quarter of the DCCC in 2012. (It was more difficult to get the information for 2014.) Small donors could fund all the viable, challengers instead of the DCCC with a bigger bang for the buck. Those candidates would not be reliant raising huge sums from big donors.
The Sanders campaign in the month of March was able to raise about the same amount as the DCCC did during the entire 2012 cycle. So far Sanders and Clinton have probably combined for over three million donors. More than 60 million Americans voted for President Obama to be re-elected, meaning many donors remain to be tapped. The potential exists for the Democratic Party to be funded completely by money raised online. Bernie Sanders has already raised enough this year to fund the entire Congressional effort spending $5 million in hard dollars per race in 50 races.
The transition to an all-small-donor-funded party will not be easy and it may not happen because losing conventionally is often a safer choice than doing things differently. But John Oliver and everyone else does a profound disservice by suggesting that only a change in law that is a long ways off can change how our campaigns are funded. The way campaigns are funded is already undergoing radical transformation. Sadly, so far it has merely been to use new methods to serve old purposes but that can and should change.