Bad Idea Revived

Andrew Samwick (via Ezra) asks:

So I'll ask a different question, as a form of a modest proposal to get the money out of politics. Why should it be legal to make a political contribution to a candidate who is not running for an office that represents you as a constituent? I do not think it should be. Imagine how different this senator's incentives would be if he could only raise money from the residents of Montana as individuals and not from organized interests.

This is not a new idea; it's an old Republican chestnut from the 1980s and 1990s. It was a lousy idea then, and a lousy idea now.

First, as Ezra Klein points out, it would increase parochialism. Indeed, given the Constitutionally-mandated malapportionment of the Senate, campaign finance through donations from citizens of other states is a democratizing element of the system, albeit a fairly blunt tool.

Second, Ezra is correct (depending on the specific regulations adopted) that it would end Member-to-Member donations. For him, this has the positive effect of removing some of the "pressure for the politicians who can raise industry money to do so." Perhaps so. But Member-to-Member donations are best seen as a form of party strength and potential party discipline. And that's not all. Ideological PACs are another partisan source of money in the campaign finance system, as are the relatively new phenomenon of internet-directed flows of money to ideological and partisan targets, such as the recent surge of donations to "you lie" Rep. Joe Wilson. In other words, it's a mistake to think of national money as a function of narrow economic interest groups; quite a lot of national money is party money of one kind or another, so if you like strong national parties you should oppose this idea.

Matt Yglesias joined the discussion of this proposal today with this contribution:

The main impact of the rule being considered would, it seems to me, be to make House incumbents much more electorally vulnerable. Most House members would simply find it very difficult to raise a great deal of money from in-district contributions. That would necessarily tend to level the playing field between incumbents and challengers. Which is probably why we won’t see it happen. But it would also probably be a good idea.

Matt gets it backwards here. There's no reason I can think of that in-district donors would be particularly interested in supporting challengers. In fact, as can be seen in the Wilson case, challengers usually depend on party money coming in from outside the district to have any chance to win. More fundamentally, as Gary Jacobson found, incumbent spending just isn't very important (because all spending has diminishing returns, and what spending can buy -- name recognition, and letting people know a couple of positive things about the candidate -- is something that most incumbents already have). So a system with less money overall is going to help incumbents, not hurt them.

And, FWIW, I'm pretty sure that Republicans in the 1980s were correct that limiting campaign money to in-district donors would in fact help them, and that is still true today. For that to be true, it would require Republican donors to be distributed relatively equally around the nation, while Democratic donors are lumped together in a relatively small number of states and Congressional districts. I don't have a citation for this off the top of my head, but as I said I'm pretty sure that's how things break down.

One more thing: on the theoretical merits, I think the case for this proposal is extremely weak. American elections are both local and national. The results of the elections for Senators and Representatives in Virginia, Montana, and New York have a profound effect on me even if I live in Texas, so it's reasonable to allow me to attempt to affect those results. On top of that, because of the nature of single-member districts, most of us live in House districts with little or no partisan competition; if we're limited to donations in our own districts, we essentially can have no effect at all on the partisan makeup of the Senate.