Comparative Issues in Party and Election Finance. F. Leslie Seidle

      Public funding has benefits. To say that questions can be raised about expenditure limits is not to render the same judgement on public funding. Even with undesirable forms of campaign money coming in through leaky expenditure limits, public funding clearly has displaced a significant amount of private donations in U.S. presidential campaigns. For example, even given the degree to which Dukakis and Bush were able to circumvent the official spending limits in 1988, public subsidies still accounted for significant amounts of their respective campaign budgets. Were that money not available, presidential candidates would likely be forced to do what congressional aspirants already are doing: pursue more PAC money.

      From a practical standpoint, the presidential candidates operate under a scheme that has been dubbed floors-without-ceilings. Unrestrained by effective spending ceilings, they nevertheless are given a base of public funding from which to get their messages across through television and other means. In fact, Dukakis’ home state of Massachusetts has a floors-without-ceilings system in which candidates receive public funding without committing to spending limits. This idea has met with resistance in Congress and many state legislatures, where some are reluctant to provide taxpayer dollars without attempting to restrain private fund spending. On the other hand, the floors-without-ceilings approach allows the candidates to spend more than the public financing provides without artificial limitations.

      Incumbents vs. challengers. Analysing campaign spending data, political scientist Gary C. Jacobson showed that campaign spending does not have the same consequences for incumbents and challengers alike. Jacobson found that spending by challengers has more impact on election outcomes than does spending by incumbents (Jacobson 1978, 469).

      Simply being known and remembered by voters is a very important factor in electoral success. The average incumbent, provided with the resources of office, already enjoys an advantage in voter recognition prior to the campaign. The dissemination of additional information about the incumbent during the campaign, therefore, may often be superfluous even though it helps reinforce voters’ opinions. On the other hand, the challenger, not so well known to most voters, has everything to gain from an extensive and expensive effort to acquire voter awareness.

      Translated into financial terms, this means that because senators and representatives are generally better known, they usually need less campaign money but are able to raise more. The challengers, while they may need more money, have difficulty in getting it. But when they do, either through providing it to their own campaigns out of their own wealth, or by attracting it, they become better known and are more likely to win. If the incumbent then raises money to meet the threat, spending money helps him or her less per dollar spent than additional dollars spent by the challenger. In summary, those votes that change as a result of campaign spending generally benefit challengers.

      Jacobson concluded that any campaign finance policy, such as public subsidies, that would increase spending for both incumbent and challenger would work to the benefit of the latter, thus making elections more competitive. On the other hand, any policy that attempts to equalize the financial positions of candidates by limiting campaign contributions and spending would benefit incumbents, thus lessening electoral competition (Jacobson 1978, 474).

      Contribution limits: How high or how low? In setting contribution limits, a balance must be struck between the need to reduce public perceptions of excessive spending and the need for candidates to raise adequate funds to communicate with voters.

      No one has seriously advocated a return to the era of the six-figure donor: the presence of $100 000 soft-money contributors in the 1988 campaigns prompted editorial criticism and a negative public reaction. At the same time, setting contribution limits too low can have the effect of turning public officials into non-stop political fund-raisers seeking to collect sufficient money in small lots.

      An appropriate limit depends greatly on the political demography of the jurisdiction for which it is intended. But the purpose should be guided by recognition that money is an essential ingredient in political campaigning. Once the decision is made, contribution limits should be indexed to inflation to prevent the type of problem that has arisen in contests for Congress: the erosion of the value of the $1 000 individual contribution limit has, among other effects, provided greater incentives for candidates to seek PAC support with the higher limit of $5 000.