“The General Public Will Not Be Heard”: John Roberts Shows He Has No Idea How Money Works In Politics
Shaun McCutcheon is the kind of donor that the Republican Party can’t get enough of. The CEO of Coalmont Electrical Development in McCalla, Alabama, McCutcheon made a small fortune from his work in the mining industry and dedicated much of his life to electing Republicans. The Chairman of the Alabama State Republican Party said that McCutcheon was great at “supporting conservative candidates, getting conservatives elected to office.” Upset that he couldn’t donate more than the federal limit of $46,200 to individual candidates, he teamed up with Senator Mitch McConnell at a CPAC conference in 2012 to launch the latest assault on campaign finance law.
In today’s Supreme Court decision, the Roberts Court, in another 5-4 decision, tore down the aggregate donation restriction. Going forward, donors like McCutcheon can donate up to $3.6 million per cycle, as long as the donations are done in $2,600 blocks to individual candidates.
In reality, the case may not have a huge impact on elections. By tearing down any restriction on the amount that an individual can donate to a Super PAC, Citizens United already opened the spigot on unlimited money in our electoral system. Today’s decision builds on Citizens United but the harm to democracy has already been done.
What is striking about the opinion is how completely off-base Chief Justice Roberts is in his understanding of the role of money in politics. Roberts struck down the law, framing the attempt to limit the flow of money into politics as an attempt to stifle unpopular speech. Just as the First Amendment protects, “flag burning, funeral protests, and Nazi parades—despite the profound offense such spectacles cause—it surely protects political campaign speech despite popular opposition.” For the Roberts Court, wealthy donors are under attack as a minority and need the protection of the Supreme Court. Under the Citizens United framework that money is speech, the court in McCutcheon struck the aggregate limit as a violation of the First Amendment.
The Court comes off as remarkably uninformed when it comes to the relationship between wealthy donors and elected officials. Roberts says that legislation cannot seek to limit what he calls the “general gratitude a candidate may feel toward those who support him or his allies, or the political access such support may afford.” Roberts said “spending large sums of money” would not “give rise to such quid pro quo corruption.” The reality is, of course, that looking for evidence of direct trades of a Congressional vote for a donation will reveal very few instances of corruption. However, as Lawrence Lessig has established, there is a broader system of “dependence corruption” in which candidates must rely on wealthy donors in order to have access to the political system. The Roberts Court reflects a lack of understanding in how money actually operates in our political system and has adopted such a hollow understanding of corruption that they are able to view our system as free of any corrupting influence.
The reality, as Justice Breyer stated from the bench, is that the decisions in Citizens United and McCutcheon “eviscerates our nation’s campaign finance law.” We are left with an inability to regulate the flow of millions into the campaign finance system and a Court that is unwilling to stand up to anything but the most blatant forms of corruption.
Conservatives will celebrate today’s decision as a victory for the First Amendment but the reality is that the right to political speech is under assault from the torrent of money pouring into our elections. This is a point that Justice Breyer captured in his dissent; “Where enough money calls the tune, the general public will not be heard.”
The Supreme Court is now controlling how the Congress can limit the electoral process but, remarkably, not a single Justice has ever held elected office. Since Justice Sandra Day O’Connor, a former State Senator in Arizona, resigned from the Supreme Court in 2005, we have not had a Justice with any experience in elected office. Since she left the Court, Justice O’Connor has openly critiqued the decision in Citizens United, and has argued “we’re in a bit of trouble in this whole area.” While putting elected officials on the Supreme Court has fallen out of fashion, due in part to the extensive voting records they are forced to defend, the Court’s decision in McCutcheon is a reminder that it may be quite valuable to have a Justice who can tell his or her colleagues how a campaign actually works and the impact of money in our electoral system.
If there is any silver lining in this decision, it is that it can help to draw public attention to the outsized role that large-scale donors are playing in our electoral process. The backlash to Citizens United demonstrated that the public does care about this issue and after today’s decision there will be a demand for further action. The decision may not change the landscape of the 2014 elections because donors can already dump huge sums of money into elections but it does show how little the Roberts Court understands about how our campaign finance system actually works. Thanks to the Roberts Court, we no longer have a working campaign finance system; all we have left, as Justice Breyer noted today, is “a remnant incapable of dealing with the grave problems of democratic legitimacy that those laws were intended to resolve.” We are living in a brave new world of elections, a world where millionaires and billionaires speak loudly and the rest of us do the listening.
By: Sam Kleiner, Fellow at Yale Law School’s Information Society Project; Published in The New Republic, April 2, 2014
“SCOTUS Sanctioned Corruption”: In McCutcheon, Justices Advance Troubling Vision Of Democracy
The Supreme Court’s McCutcheon decision today dealt another serious blow to the regulation of money in politics. In its 5-4 decision, the Court struck down the federal aggregate contribution limits, which restrict the amount one person can contribute to all candidates, parties, and political committees combined. As a result, one person can now give more than $3.6 million to one party’s candidates and committees in a single election cycle (under the limits, one could give “only” $123,200 per election cycle). With a sufficiently sophisticated joint fundraising apparatus, this money could be given in response to a solicitation from a single party leader.
While this is troubling by itself, the more sinister part of the decision lies in the groundwork the decision laid for future money in politics cases.
The Court doubled down on its holding that corruption only includes contributions given with the expectation of receiving official action in return — essentially a direct bribe in the guise of a political contribution. The Court also acknowledged that contributions can be used to gain ingratiation with and access to government officials while not reaching the level of outright bribery. But the Court praised this relationship rather than condemning it:
“We have said that government regulation may not target the general gratitude a candidate may feel toward those who support him or his allies, or the political access such support may afford. . . . They embody a central feature of democracy—that constituents support candidates who share their beliefs and interests, and candidates who are elected can be expected to be responsive to those concerns.”
This vision of the Constitution is wrong. It elevates wealthy donors who can afford to buy influence over 99.99 percent of Americans, who have an equal right to representation. Although the Court may talk in the language of protecting constituents, the outcome is clear — big donors can give to however many candidates they want, regardless of whether they can vote for those candidates or would be constituents of those candidates. This case is about big money, not constituents.
Beyond this, the overtones of the decision suggested that contribution limits may be subject to harsher constitutional scrutiny in the future. If the Court changes this standard for review, it will be more difficult to successfully defend contribution limits from First Amendment challenges in future cases. The Campaign Legal Center’s Trevor Potter describes this danger in a blog post that predates the McCutcheon decision.
There are still meaningful ways to limit the power of big money in our political system. We need to enact disclosure laws to eliminate dark money, elevate the voices of ordinary voters through small donor public financing, strengthen rules against coordinated spending and the circumvention contribution limits, and ensure existing rules are enforced.
But until then, even more money will flow directly to candidates, further marginalizing average voters at the expense of the wealthy. While this is just the latest step in a long line of recent cases weakening our campaign finance system, the decision strongly signals that more is still yet to come.
By: David Earley, Brennan Center For Justice, April 2, 2014
“A Corrosive Effect On Public Confidence”: The ‘Sheldon Primary’ Is One Reason Americans Distrust The Political System
Several prospective Republican presidential candidates have gathered in Las Vegas for the opening round of what has been dubbed “the Sheldon Primary,” an event emblematic of how warped the system for financing presidential elections has become.
The Sheldon Primary is named for Sheldon Adelson, the wealthy casino owner who, with his wife, poured more than $92 million into the 2012 elections. Despite all that money, Adelson made some bad bets in the last election, first on former House speaker Newt Gingrich to win the Republican nomination and then on Mitt Romney to defeat President Obama in the general election.
He is now looking toward 2016 with a fresh eye, determined, according to The Post’s Matea Gold and Philip Rucker, to find a non-extremist candidate who can actually win the presidency. Those who are looking at running would be happy to have that kind of financial support. Some of them have come to Las Vegas on Friday for a meeting of the Republican Jewish Coalition, but also to meet privately with Adelson.
Adelson has become a symbol of the new system of financing presidential elections. He and others play under legal rules. But this new financing structure has had a corrosive effect on public confidence in government and politicians. It is why so many Americans feel shut out of the process.
Many people have had a role in bringing the system to this point — the courts, special interests, incredibly wealthy individuals with their own agendas and candidates seeking to gain political advantage in the fierce competition that is presidential politics.
A series of court decisions, the most prominent being the Supreme Court’s 2010 ruling in Citizens United v. Federal Election Commission, has hastened the rise of super PACs. These political action committees are the new behemoths in political campaigns. They are allowed to take unlimited contributions from corporations, unions and individuals. They can openly advocate for individual candidates, and candidates can help raise money for them. But they are supposed to operate independent of those candidates.
Court decisions also helped usher in a new era of shadowy financing of political activity by so-called “social welfare” groups. Like super PACs, these groups also take huge individual donations — $10 million, $20 million, $30 million — but they are not required to disclose their contributions. They can engage in political activity within limits, but those limits have done little to slow their growth.
Meanwhile, the system of public financing for presidential candidates that came into being after the Watergate scandal and that once was universally accepted and respected by those seeking the presidency has been systematically shredded over the course of the last four presidential campaigns.
In 2000, George W. Bush opted out of public financing in his nomination campaign because money was flowing so freely into his campaign war chest and he was worried about rival Steve Forbes’s ability to fund his own campaign out of his private fortune. John F. Kerry and Howard Dean followed suit four years later in their nomination battle. That effectively destroyed the use of public money in pursuit of the nomination.
Then in 2008, Obama took it a step further. Fueled by nearly half a billion dollars in online donations alone, candidate Obama decided to forgo public financing in the general election after suggesting that he would stay within the system if his Republican rival did, too. His opponent, Sen. John McCain, was one of the most ardent advocates of campaign finance reform who was left to chastise Obama for turning his back on a general election public financing structure designed to level the playing field. Having seen what happened in 2008, Romney in 2012 followed Obama out the door of public financing.
All of these candidates who pulled out of public financing put political need ahead of public interest. They chose to quit the system because by doing so they could spend well beyond the limits of what the law allowed if they accepted federal matching funds. Meanwhile, some of their rivals were constrained by the limits imposed by the acceptance of public money.
What is left now is an arms race in presidential campaign fundraising by the candidates and a new power base, the quasi-independent force of the super PACs, which have eclipsed the political parties as powerbrokers in the campaign process.
Courting wealthy people will always be an essential part of running for president. But the outsize influences of people who are prepared to give tens of millions to a super PAC or the contributor who can bundle hundreds of thousands of dollars in donations have changed the game.
The ability to raise huge amounts of money has become an even more important attribute for those seeking the presidency, a yardstick to stratify the field of candidates long before the voters have taken a serious look at the field.
Dark horse candidates still can break through in one of the early states, as former senator Rick Santorum did in 2012. But anyone thinking of running for president today would be urged by those who shape this inside game not even to think about taking public funds to help finance their campaign and to build a financial foundation designed to go the distance.
Obama was initially critical of super PACs, but there is no longer any hesitation among Democrats to play in this new world. Hillary Rodham Clinton already has a super PAC organizing on her behalf, though she is far from making an announcement about whether she will run in 2016. Priorities USA, which supported Obama in 2012, has reconstituted itself more aggressively than ever in preparation of her candidacy.
Republican politicians know that whomever Adelson and his wife decide to support in 2016 will have what is now a required asset of any campaign—a well-funded super PAC that can provide additional armor against the inevitable attacks from opponents and which can lead the attacks against rivals who threaten their path to victory. Those who lose the Sheldon Primary will look to other rich people to fund other super PACs dedicated solely to the promotion and protection of their candidacies.
Super PACs have yet to prove they can decide the outcome of elections. Romney lost the general election despite having a clear advantage in the amount of outside money on his side. But the super PACs’ role in the GOP nominating process was more significant. Without Adelson at his side, Gingrich might not have lasted as long as he did. Without the support of his own super PAC, Romney might have had a more difficult time fending off Gingrich and later Santorum. That knowledge is what has brought several prospective candidates to Las Vegas.
When W. Clement Stone, an insurance magnate and philanthropist, gave $2 million to Richard M. Nixon’s 1972 campaign, it caused public outrage and contributed to a movement that produced the post-Watergate reforms in campaign financing. Accounting for inflation, that $2 million would equal about $11 million in today’s dollars. If not exactly commonplace, contributions of that size or larger are now an accepted part of the presidential campaign process, in some cases without real transparency. Is it any wonder that the public has a cynical view of how the system works?
By: Dan Baltz, Opinion Writer, The Washington Post, March 28, 2014
“America’s Taxation Tradition”: Public Policy Should Seek To Limit Inequality For Political As Well As Economic Reasons
As inequality has become an increasingly prominent issue in American discourse, there has been furious pushback from the right. Some conservatives argue that focusing on inequality is unwise, that taxing high incomes will cripple economic growth. Some argue that it’s unfair, that people should be allowed to keep what they earn. And some argue that it’s un-American — that we’ve always celebrated those who achieve wealth, and that it violates our national tradition to suggest that some people control too large a share of the wealth.
And they’re right. No true American would say this: “The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power,” and follow that statement with a call for “a graduated inheritance tax on big fortunes … increasing rapidly in amount with the size of the estate.”
Who was this left-winger? Theodore Roosevelt, in his famous 1910 New Nationalism speech.
The truth is that, in the early 20th century, many leading Americans warned about the dangers of extreme wealth concentration, and urged that tax policy be used to limit the growth of great fortunes. Here’s another example: In 1919, the great economist Irving Fisher — whose theory of “debt deflation,” by the way, is essential in understanding our current economic troubles — devoted his presidential address to the American Economic Association largely to warning against the effects of “an undemocratic distribution of wealth.” And he spoke favorably of proposals to limit inherited wealth through heavy taxation of estates.
Nor was the notion of limiting the concentration of wealth, especially inherited wealth, just talk. In his landmark book, “Capital in the Twenty-First Century,” the economist Thomas Piketty points out that America, which introduced an income tax in 1913 and an inheritance tax in 1916, led the way in the rise of progressive taxation, that it was “far out in front” of Europe. Mr. Piketty goes so far as to say that “confiscatory taxation of excessive incomes” — that is, taxation whose goal was to reduce income and wealth disparities, rather than to raise money — was an “American invention.”
And this invention had deep historical roots in the Jeffersonian vision of an egalitarian society of small farmers. Back when Teddy Roosevelt gave his speech, many thoughtful Americans realized not just that extreme inequality was making nonsense of that vision, but that America was in danger of turning into a society dominated by hereditary wealth — that the New World was at risk of turning into Old Europe. And they were forthright in arguing that public policy should seek to limit inequality for political as well as economic reasons, that great wealth posed a danger to democracy.
So how did such views not only get pushed out of the mainstream, but come to be considered illegitimate?
Consider how inequality and taxes on top incomes were treated in the 2012 election. Republicans pushed the line that President Obama was hostile to the rich. “If one’s priority is to punish highly successful people, then vote for the Democrats,” said Mitt Romney. Democrats vehemently (and truthfully) denied the charge. Yet Mr. Romney was in effect accusing Mr. Obama of thinking like Teddy Roosevelt. How did that become an unforgivable political sin?
You sometimes hear the argument that concentrated wealth is no longer an important issue, because the big winners in today’s economy are self-made men who owe their position at the top of the ladder to earned income, not inheritance. But that view is a generation out of date. New work by the economists Emmanuel Saez and Gabriel Zucman finds that the share of wealth held at the very top — the richest 0.1 percent of the population — has doubled since the 1980s, and is now as high as it was when Teddy Roosevelt and Irving Fisher issued their warnings.
We don’t know how much of that wealth is inherited. But it’s interesting to look at the Forbes list of the wealthiest Americans. By my rough count, about a third of the top 50 inherited large fortunes. Another third are 65 or older, so they will probably be leaving large fortunes to their heirs. We aren’t yet a society with a hereditary aristocracy of wealth, but, if nothing changes, we’ll become that kind of society over the next couple of decades.
In short, the demonization of anyone who talks about the dangers of concentrated wealth is based on a misreading of both the past and the present. Such talk isn’t un-American; it’s very much in the American tradition. And it’s not at all irrelevant to the modern world. So who will be this generation’s Teddy Roosevelt?
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 27, 2014
“A Nation Of Takers?”: Demanding Cuts In Public Assistance To The Poor, While Ignoring Public Assistance To The Rich
In the debate about poverty, critics argue that government assistance saps initiative and is unaffordable. After exploring the issue, I must concede that the critics have a point. Here are five public welfare programs that are wasteful and turning us into a nation of “takers.”
First, welfare subsidies for private planes. The United States offers three kinds of subsidies to tycoons with private jets: accelerated tax write-offs, avoidance of personal taxes on the benefit by claiming that private aircraft are for security, and use of air traffic control paid for by chumps flying commercial.
As the leftists in the George W. Bush administration put it when they tried unsuccessfully to end this last boondoggle: “The family of four taking a budget vacation is subsidizing the C.E.O.’s flying on a corporate jet.”
I worry about those tycoons sponging off government. Won’t our pampering damage their character? Won’t they become addicted to the entitlement culture, demanding subsidies even for their yachts? Oh, wait …
Second, welfare subsidies for yachts. The mortgage-interest deduction was meant to encourage a home-owning middle class. But it has been extended to provide subsidies for beach homes and even yachts.
In the meantime, money was slashed last year from the public housing program for America’s neediest. Hmm. How about if we house the homeless in these publicly supported yachts?
Third, welfare subsidies for hedge funds and private equity. The single most outrageous tax loophole in America is for “carried interest,” allowing people with the highest earnings to pay paltry taxes. They can magically reclassify their earned income as capital gains, because that carries a lower tax rate (a maximum of 23.8 percent this year, compared with a maximum of 39.6 percent for earned income).
Let’s just tax capital gains at earned income rates, as we did under President Ronald Reagan, that notorious scourge of capitalism.
Fourth, welfare subsidies for America’s biggest banks. The too-big-to-fail banks in the United States borrow money unusually cheaply because of an implicit government promise to rescue them. Bloomberg View calculated last year that this amounts to a taxpayer subsidy of $83 billion to our 10 biggest banks annually.
President Obama has proposed a bank tax to curb this subsidy, and this year a top Republican lawmaker, Dave Camp, endorsed the idea as well. Big banks are lobbying like crazy to keep their subsidy.
Fifth, large welfare subsidies for American corporations from cities, counties and states. A bit more than a year ago, Louise Story of The New York Times tallied more than $80 billion a year in subsidies to companies, mostly as incentives to operate locally. (Conflict alert: The New York Times Company is among those that have received millions of dollars from city and state authorities.)
You see where I’m going. We talk about the unsustainability of government benefit programs and the deleterious effects these can have on human behavior, and these are real issues. Well-meaning programs for supporting single moms can create perverse incentives not to marry, or aid meant for a needy child may be misused to buy drugs. Let’s acknowledge that helping people is a complex, uncertain and imperfect struggle.
But, perhaps because we now have the wealthiest Congress in history, the first in which a majority of members are millionaires, we have a one-sided discussion demanding cuts only in public assistance to the poor, while ignoring public assistance to the rich. And a one-sided discussion leads to a one-sided and myopic policy.
We’re cutting one kind of subsidized food — food stamps — at a time when Gallup finds that almost one-fifth of American families struggled in 2013 to afford food. Meanwhile, we ignore more than $12 billion annually in tax subsidies for corporate meals and entertainment.
Sure, food stamps are occasionally misused, but anyone familiar with business knows that the abuse of food subsidies is far greater in the corporate suite. Every time an executive wines and dines a hot date on the corporate dime, the average taxpayer helps foot the bill.
So let’s get real. To stem abuses, the first target shouldn’t be those avaricious infants in nutrition programs but tycoons in their subsidized Gulfstreams.
However imperfectly, subsidies for the poor do actually reduce hunger, ease suffering and create opportunity, while subsidies for the rich result in more private jets and yachts. Would we rather subsidize opportunity or yachts? Which kind of subsidies deserve more scrutiny?
Some conservatives get this, including Senator Tom Coburn, Republican of Oklahoma. He has urged “scaling back ludicrous handouts to millionaires that expose an entitlement system and tax code that desperately need to be reformed.”
After all, quite apart from the waste, we don’t want to coddle zillionaires and thereby sap their initiative!
By: Nicholas D. Kristof, Op-Ed Columnist, The New York Times, March 26, 2014
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