How $50 Can Beat Big Money

Sen. John McCain (R-Ariz.) thinks the time is right for a watered-down version of his campaign finance reform bill. He could not be more wrong. What the United States needs is a fundamental debate about the ultimate objectives of the reform movement.

The current reform effort will never succeed, but there is one that can be made to work: Give every registered voter a $50 voucher that he or she can only spend to support candidates or political organizations in federal elections. Rather than struggling in vain to suppress the flow of private money, drown out the threat of private influence with a huge injection of citizen-dollars into the political process.

Whenever the law tries to restrict the amount of private money sloshing through the political system, it creates two big problems. Most obviously, it reduces the amount of political debate. While money isn’t speech, it makes effective speech possible, especially in an age of mass media. Less money, less speech. Do we really want equality at the cost of shutting down debate?

Restricting the flow of cash may also perversely affect the balance of power between incumbents and challengers. Incumbents go into campaigns with public reputations generated through years of high-visibility service. Challengers need lots of cash to offset this advantage. By placing an overall limit on funds, aren’t we allowing old-timers to tighten their grip on office under the banner of “reform”?

These questions endure despite the second traditional strategy: government subsidy through a centralized bureaucracy. During the last weeks of a hard-fought campaign, will bureaucrats tilt against challengers by arbitrarily denying them federal funds at crucial moments? Even if careful statutory controls reduce the risk of bias, a centralized subsidy scheme will make it harder for grass-roots movements to compete with the established political parties on relatively equal terms.

Bureaucratic heavy-handedness will be entrenched further by the third reform initiative. This technique targets particular “bad guys” for intensive regulation. The mass media are singled out for price controls on political advertising. Political action committee money is restricted in new ways that enhance bureaucratic intervention into the nuts and bolts of the political process.

The result of all these “reforms” is a system that increases bureaucratic control and decreases the overall resources available for dynamic public debate.

We only have primitive regulatory thinking to blame for this outcome. We can achieve genuine campaign reform at an acceptable price by relying on more innovative regulatory methods. The most promising system adapts the voucher technique that already is discussed in education and welfare reform.

When Americans register to vote, issue them a credit card by a public company--call it the Patriot Co. card and color it red, white and blue. This card will become the basis of campaign finance.

Suppose that each voter’s card were automatically credited with a $50 balance for the 2000 electoral cycle. To gain access to this red, white and blue money, candidates and other political organizations would be obliged to demonstrate significant popular support by gathering an appropriate number of voter signatures. Upon receipt of these signatures, the Patriot Co. would open an account that grants the candidate an initial balance of red, white and blue money--say, $1 million for presidential aspirants. Candidates could then spend their initial stake on advertisements aimed at persuading Patriot holders to transfer more red, white and blue money to them. Some candidates will, of course, soon see their initial balance shrink to zero; others will generate tens of millions as the campaign proceeds.

The resulting system reduces the influence of private wealth without transferring power from the general citizenry to an imperial bureaucracy. It also obviates the need to target PACs or other regulatory scapegoats. If the American Medical Assn. can persuade doctors (or their patients) to transfer their 50 red, white and blue dollars to Doctors for Good Government, rather than Citizens for Gore or Bush, Patriot does not prevent interest groups from continuing to play the game of electoral politics. It merely allows average Americans to compete effectively with the rich, and that, after all, is supposed to be the ultimate reform objective.

For example, federal campaigns will probably raise more than $3 billion from all sources during the current election cycle. But if each of the 100 million American voters spent his or her $50 voucher, this would inject 5 billion Patriot dollars into the mix, greatly diluting the flow of special interest funds.

Patriot Co. is no panacea. However, this is not the place to elaborate all the legal and technical questions raised in its operation. It is more important to urge the Senate to give up on the McCain-Feingold charade and rethink the kind of campaign reform that is worthy of serious discussion.