In 2010 the Supreme Court handed down its ruling on the case of Citizens United v FEC which had profound repercussions on financing of national elections in the US. A lot has been said on the creation of PACs and the flooding of “dark money” into our elections. That is not my focus here, however, instead I would like to examine another aspect of campaign finance that seems to have been overshadowed by the volume of money and lack of transparency in PACs—that is individual contributions.
An important underpinning of the majority opinion of Citizens United was that political contributions are functionally political speech. To limit that speech would be to infringe on an individual’s freedom of speech enshrined within the First Amendment. I do not necessarily take issue with this argument, a donation to a political campaign does seem to be an expression of a political opinion akin to speech. I am not sure, though, whether this application is entirely consistent. Pick any member of the House of Representatives (other than your Representative); go to their website, navigate to their “Contact Your Representative” page, and try to email them. You will be prompted to put in your zip code before you have the opportunity to email the Representative. Now I understand this is a bit flimsy, you could put in the relevant zip code to be able to send the email, or just call the Representative using the number on same site. As far as I’m aware, this has not been brought before a Supreme Court as an infringement of political speech. Maybe the Court would rule that this limitation is similarly an unconstitutional restriction of an individual’s political speech. This example is suggestive though. What is explicit within the coding of the House of Representative websites is a filter, intended to limit citizens’ opinions communicated to the Representative to that Representative’s constituents with the intended goal of ensuring responsiveness to only their constituents, which I think intuitively makes sense.
Let’s look to another example. When you go to vote you report to the polling place in the district which you are registered; there will be Representatives from one district you are able to vote for and Senators from one state. After you vote you are not able to then go over to the next district or state to vote for the Representative or Senator in in that district or state’s election. Voting is political speech at its most pure form. The Supreme Court would certainly protect the right of individual to vote, right? But it would be ridiculous to argue that limiting my ability to vote in multiple states and districts to vote for multiple Representatives and Senators is limiting my political speech. Or more specifically, limiting my political speech in such a way that is inconsistent with our constitutional framework and political norms, under which our country has operated.
So, we restrict political speech in all sorts of ways; by either making it difficult to contact a Representative outside of one’s own district or restricting voting to one’s own district and state. We either do not find this to be a limitation of speech or find these limits to be reasonable. Either way the end result is the same, but when it comes to financing campaigns we toss out all nuance, instead applying an expansive understanding of freedom of speech. Though it should also be note that broadly speaking freedom of speech and the First Amendment are not absolute rights, by the Supreme Court’s own rulings. The practical consequences of this expansive defense of political speech is documented in figure A, below. It should be noted that these percentages were calculated using individual contribution date from the Federal Elections Commission website and only includes the first and second quarters of 2020.
Figure A[1]
The counter factual is difficult here. McConnell did face primary challengers in the 2020 Kentucky Senate Primary, but he easily won with 83% of the vote. Had McConnell not had the national fundraising machine behind him would one of the Republican challengers posed a serious threat to McConnell in a primary race? Would a more qualified candidate step up if McConnell did not have large donors in his corner? It is important to note that McConnel has raised more money than McGrath, while only raising nominally more from in-state, but without out-of-state contributions would she pose more of a challenge? It’s hard to say. And pointedly, it’s not for me to say, it is for the people of Kentucky to say.
Returning to the national contributions, and our second point, as the percentage of in-state contributors is higher than the in-state contribution percentage, on average out-of-state contributors are donating higher dollar amounts than those contributors within the state. This means that not only are out-of-state contributors a high percentage of all contributors, but, on average, out-of-state contributors are also out contributing their in-state counterparts in individual contribution amounts. If money is speech, then out-of-state contributors are shouting over in-state contributors.
Third, and lastly, the contribution percentage is between 12% and 20% of bi-weekly income. Thinking about this in a different way; financial advisors recommend contributing at least 10% of every paycheck to one’s retirement fund. The 15-year average aggregate participant and employer contribution rates as of 2018 from Vanguard was 10.6%, meaning that individuals are making larger contributions to political campaigns, in some cases campaigns for candidates that do not represent them, than the contributions they are making to their own future retirement. One difference to keep in mind, these political contributions are one-time expenditures, not recurring expenses as retirement contributions would be—the average contributor is making four donations through two quarters. Given that out-of-state contributors are contributing at a higher dollar amount, they are driving the higher percentage of bi-weekly income, and the higher percentage the more difficult it is for individuals within a given state to match these contributions.
If it is not clear by this point, these are not legal arguments. These are arguments of fairness and an appeal to common sense. Alternative proposals exist; caps to contributions amounts, contribution vouchers, and federal funding of campaigns. None of these proposals solve the issue of contributions crossing political boarders. Further, this argument of fairness in campaign contributions ignores the inequity inherent in other forms of political speech—i.e. newsroom endorsements. Maybe it’s worth creating equality of speech in this respect, however this seems a more difficult sell.
The solution here is fairly simple; the population of eligible contributors to an election campaign should be limited to the population of eligible voters. Said another way, if you can vote in the election you can contribute to the campaign. As laid out above, it could be argued that this is a limitation of political speech, but we already limit similar political speech in the same way by restricting who can contact Representatives and who votes in Senate and Representative elections. It would be foolish not to recognize that monetary political contributions affect political outcomes, otherwise the political machine to raise money would not exist. It seems odd to me to restrict who can vote on the outcome of an election, when they are not involved in setting the terms of the election.
[1] In and out-of-state contribution percentages were calculated using state by state data obtained from the Federal Elections Commission (FEC) website. Contribution Percentage of Income is representative of the average contribution amount as a percentage of bi-weekly salary. This was calculated using the average state contribution amount from the FEC website and Per Capita Income by State obtained from the Bureau of Economic Analysis, divided by 26 to calculate the bi-weekly salary.
