“On campaign reform, the central issue is spending limits.”
-Senate Majority Leader George Mitchell,
Nov. 29, 1992
Everybody, it seems, wants campaign finance reform. Bill Clinton and Ross Perot made political reform a central tenet in their campaigns. Now that Clinton has been elected, the pressure for a Democratic president and a Democratic Congress to act is intense.
The problem, as usual, is what to do. Democrats have long maintained that spending limits are an essential part of any campaign finance reform package. Republicans are viscerally opposed, so opposed that limits are usually seen as the chief obstacle to change. Democrats claim that limits will free candidates from the demands of constant fundraising and reduce the influence of monied interests. Republicans argue that spending limits will harm challengers, guaranteeing the re-election of incumbents and, in the process, a continued Democratic majority in Congress. Academics have generally agreed with the Republicans, but our research shows both are wrong: Campaign spending limits will not hurt challengers. Furthermore, limits combined with public financing-a necessary step for legal reasons-will greatly benefit challengers of both parties.
The Republican argument against ceilings rests on the assumption that challengers begin their races so far behind well-known incumbents that they must outspend them to win. In House elections, at least, one statistic supports the Republican view: Successful challengers from 1974 to 1988 did on average slightly outspend their incumbent opponents. But this evidence is extremely weak. First, it is based on average spending. About half of successful challengers won despite financial disadvantages, a point that directly contradicts Republican claims.
More important, only a handful of challengers managed to outspend their opponents. Designing a policy to protect the rights of this minority ignores the vast majority of challengers who were outspent. These challengers usually ended up swamped by a sea of incumbent dollars; the mean incumbent spending advantage in all races approaches $200,000. For the overwhelming mass of challengers, the premise of financial parity would be a
great breakthrough.
The problem, Republicans argue, is that these candidates generally have no chance of winning, and limits would restrict the ones who do. This claim can be tested. To do so we measured the impact of campaign spending by challengers and incumbents in House elections. Then we simulated the effect of limits by restricting candidate spending and looking to see how challengers fared under these conditions.
The results show two things. First, if the concern is the average challenger’s share of the vote, limits at even low levels will help them. Restricting candidate expenditures to $50,000 would increase the average challenger vote from 33 to 34 percent. That illustrates how badly the average challenger is outspent, but it still leaves them far from winning.
How about those challengers who might win? How would ceilings affect their chances? The best way to measure this is to count the number of challengers who managed a serious effort and received more than 45 percent of the vote. Extremely low limits would virtually eliminate close races as Republicans fear, but limits beyond $400,000 would have absolutely no impact on the number of tight elections. Almost no one would set limits this low. Top challengers would not be harmed by any of the plans presently under serious consideration in the House.
But the Supreme Court in effect has ruled that spending limits without public financing are unconstitutional. What happens when subsidies are included? The answer is clear: Challengers benefit. For example, during the last Congress the House passed a plan to provide matching funds of up to $200,000 for candidates who accepted a $600,000 spending limit. We estimated the impact of this plan and found that the predicted number of close races increased 23 percent. Perhaps we should not say this within earshot of House incumbents, but the combination of spending limits and subsidies they passed last year would have helped their opponents. This aid is not limited to Democrats or Republicans; both parties’ challengers will profit.
How accurate are these simulations? By statistical standards, they are as accurate as most polls. If anything, we have probably underestimated the favorable consequences of campaign finance reform for challengers by ignoring the real possibility that the availability of funds will attract better challengers.
It is a shame that misconceptions about the effect of limits have the potential to derail campaign finance reform efforts. Republicans who oppose them should reassess their position, for reasonable limits would not hinder challengers. In fact, if they truly care about challengers, Republicans should support spending limits and spending subsidies. The result would be a campaign finance system that gives challengers a fairer shake, gives incumbents freedom from constant fundraising, and gives the public a Congress less beholden to the potential influence of campaign contributors.
