As we begin to debate the House Democrats’ landmark “For the People Act” (HR 1), here’s one pushback we might expect to see: The small-donor public matching system in the bill costs too much public money.
Lee Drutman is the author of Breaking the Two-Party Doom Loop: The Case for Multiparty Democracy in America. He is a senior fellow at the think tank New America, a lecturer at Johns Hopkins University, and the co-host of the podcast Politics in Question.
It’s a standard argument that campaign finance reform opponents often make. But it only focuses only on the costs. It doesn’t take into account the benefits. A publicly funded campaign finance system will save taxpayers far more money than it costs them. It will pay for itself in more responsive and smarter public policy.
Never forget: Last Congress’s HR 1 cost taxpayers more than $1.5 trillion
As a simple comparison, let’s put the current Congress’s HR 1 up against that of the last Congress — Republicans’ massive tax bill. By most estimates, the tax bill’s 10-year cost will be $1.5 trillion (that’s trillion with a T). Some estimates put it closer to the $2 trillion mark, or even $2.3 trillion.
And why so expensive? Well, the bill gave massive benefits to corporate executives and the very rich. As Republican Rep. Chris Collins said about the tax reform bill, “My donors are basically saying, ‘Get it done or don’t ever call me again.’” By one estimate, tax lobbyists donated $9.7 million in 2017. The tax bill was full of big and small wins for corporate lobbyists.
This raises an obvious question: If Republican lawmakers hadn’t been so eager to please their big donors, would they have put together a different bill? Perhaps if they had been raising money from small donors in their districts, instead of raising money from lobbyists at Washington fundraisers and listening to very rich people complain about taxes being too high, their tax bill might actually have given most of the benefits to the middle class. Who knows?
Small donor matching will cost about $1/year. It’s an incredible deal for taxpayers.
The small-donor matching system in HR 1 creates a 6-to-1 public match for every dollar raised in small-dollar contributions (under $200). No doubt, this will cost some money. A reasonable estimate might be about $3 billion over 10 years (under $1 per year per citizen), but a lot will depend on how widely it gets used.
The news system would fundamentally change how money gets raised. rather than spending their time calling rich people and attending fundraisers on K Street, individual members would have a greater incentive to do fundraising events back in their districts. As a result, they’d get a very different sense of the most important problems facing the country.
Anything that takes members of Congress away from the gamut of lobbyist-sponsored fundraisers and cold-calling wealthy people and puts them in the living rooms of more representative groups of constituents would be a major game changer for the kinds of concerns that filter up to lawmakers as top priorities. This could significantly alter the premium parties now put on big-donor fundraising prowess in their candidate recruitment strategies. It could also pave the way for a new winning politics of economic fairness.
And let’s say it helps pave the way for tax reform that benefits middle-class Americans. This will almost certainly benefit Americans by more than $1 per year. If it frees lawmakers from dependence on the pharmaceutical industry and helps reduce the costs of prescription drugs, it will save taxpayers more than $1 per year. If it frees lawmakers from dependence on Wall Street, and paves the way for lawmakers to regulate exploitative consumer fees and penalties, it will save taxpayers more than $1 per year.
Why “dynamic scoring” makes sense for democracy reform
In recent years, Republicans have argued that when the Congressional Budget Office estimated the costs of policies like tax cuts, CBO tended to over-estimate the costs by using overly-static forecasting models. Instead, Republicans argued, economic forecasters should use “dynamic scoring” to model the ways in which enacting tax cut would change the economy.
In Republicans’ over-optimistic expectations, tax cuts always pay for themselves because they generate so much wealth, and even at lower tax rates, the government collects more money. The assumptions are insane. But the basic idea makes some sense: The economy is a complex dynamic system, and changing the tax rates will change the economy, though never as dramatically as Republicans say it will.
In a similar way, policymaking is also a complex dynamic system. The bills that ultimately pass reflect a complex behinds-the-scene negotiations among many competing interests. But when lawmakers are primarily raising their campaign contributions from a limited number of very wealthy donors, those donors wind up with disproportionate say in which bills advance, and how they are written. Like the 2017 Republican tax bill, all bills distribute costs and benefits to taxpayers. The costs and benefits depend on which interests lawmakers are keeping in mind as they write the bills.
Campaigns cost money. And that money has to come from somewhere. There are no free lunches. If the public doesn’t foot the cost of political campaigns, wealthy donors and lobbyists will. And they will get something in return. And it will be far more than what they paid in. That’s how the system works.
If we enact public financing through a small-donor matching system, the public will also get something in return. And it will be far more than what they paid in. That’s how the system works.
