Is Money in Politics a Problem?

What Does 'Money in Politics' Really Mean?

When people think about money in politics and corruption, they may imagine unmarked bills neatly stacked in a briefcase, given to members of congress in a dark alley. They may think about dark money. The reality isn’t quite that exciting...or simple.

We have laws that prohibit explicit bribery of legislators. Yet big money in politics continues its pernicious assault on America’s political system in other ways. And right now, it's completely legal.

Lobbyist Hands Briefcase Full of Money to a Legislator

Elections Cost Money… Lots of Money.

The growth of election spending is staggering. In total, the 2016 presidential and congressional elections cost $6.4 billion⁽¹⁾ -- a 50% increase from 2000’s inflation-adjusted price tag of $4.3 billion. This increase is fueled by a growth in independent expenditures⁽²⁾, following the controversial 2010 Supreme Court decision in Citizens United v. FEC.

These high costs mean politicians must fundraise at breakneck pace to build a winning warchest. All told, winning United States senators spent an average of $19.4 million in 2016⁽³⁾, requiring them to raise an average of $8,900 per day over their six-year term. In competitive races, these costs are even higher; winning senators in Pennsylvania and New Hampshire had to raise about $40,000 a day over the same period to cover their total expenditures.†

Prohibitively expensive campaigns make it easier for incumbents, who already have donor networks in place, to hold on to their seats regardless of their job performance. And they all but preclude people without big-money connections or finances from running for office, thus narrowing the field and leaving voters with fewer choices.

Money in politics is on the rise

Raising Tons of Money Takes Tons of Time

Many aspects of our lives are affected by public policy -- and thus the politicians who make that policy. With that kind of responsibility, you might hope politicians spend countless hours studying the issues on which they’re about to vote.

Unfortunately, they often have bigger fish to fry. Raising the kind of money needed to stay in office isn’t easy. It takes resources: chief among them, time.

Newly elected officials in both parties are told by party leaders to spend about 30 hours a week fundraising⁽⁴⁾. A Democratic Congressional Campaign Committee graphic, publicized in 2013, shows a suggested ten-hour day for incoming officials, broken down into chunks of activities that mostly involve donor outreach.

Fundraising Schedule for New Members of Congress

That’s a major problem for American politics. Time spent fundraising can’t be devoted to examining policy, touching base with your constituents, or any of the other responsibilities the public would likely expect of elected officials. And don’t count on Congress to fix the system either.

If You Don't Donate, You're Not "Relevant"

Politicians’ extreme need for funds isn’t matched by a ubiquity of deep-pocketed donors. Only about 1 in 200 Americans⁽⁵⁾ — less than one half of one percent —donated more than $200 in the 2016 election cycle, but that tiny sliver of the population together contributed $3.3 billion - about 70% of all the money in that election. An even smaller fraction of the population, 0.05%, or 1/20th of one percent (that’s 1 in 2,000), comprises what Larry Lessig calls “relevant funders”⁽⁶⁾ -- those who give the maximum amount to a candidate.

Lawrence Lessig Speaks on Corruption at TED

Even within that small subset of the population, there’s a stark imbalance in terms of expenditure. The top 1% of the 1% (.01%) of Americans contributed nearly 30% of all donations in the 2014 midterm elections⁽⁷⁾.

With the system set up the way it is, can we blame our candidates? The fact is, it’s a lot more efficient to court one $10,000 donation from a wealthy donor in their living room than a thousand $10 donations from average voters during their busy workdays. Knowing this, politicians spend their time wooing wealthy potential donors, not average voters. Therein lies another problem with money in politics: politicians become dependent on a minuscule, unrepresentative group of society in order to get elected — and as a result, they legislate in response to those donors needs, often at the expense of regular people.

These mega-donors are relatively homogenous⁽⁸⁾; they’re 75% male, likely to work in finance, and nearly all live in major metropolitan areas. Of course, they’re also incredibly wealthy. That such a small group holds such outsize influence with public officials is concerning because it sets up the potential for conflicts of interest between the public good and those charged with keeping it.

Money Spent Influencing Politics by Industry

Entire industries spend billions of dollars influencing our government every year. As we’ve noted, not all lobbying is bad; in fact, citizens getting involved is fundamental to a working republic. The problem comes when lobbying gets mixed with political fundraising and campaign spending.

In some cases, lobbyists are able to use massive donations to secure legislation that advantages certain groups at the direct expense of others. Sometimes, this is regulation that creates barriers to new competition and gives an unfair advantage to incumbent businesses. In other cases, the potential for financial gain is more overt. Well connected special interests often lobby for taxpayer-funded subsidies.

Money in Politics by Industry

Analysis by the Sunlight Foundation⁽⁹⁾ shows the top 200 most politically-active organizations spent a total of $5.8 billion on federal lobbying and campaign contributions between 2007 and 2012. Over that period, those same organizations received $4.4 trillion in federal business and support, or a $760 ROI for every $1 spent.

Return on Investment for Money Spent on Campaigns

A Vicious Cycle

In America, money in politics feeds a vicious cycle -- rising campaign costs, decreasing electoral competition, increased political reliance on a small portion of society -- that eats away at the clout of the average voter. The winners of this phenomenon are clear, as are the losers. Politicians get to hold on to their seats; wealthy donors get to keep influencing public policy to their own benefit. The rest of us, however, find ourselves increasingly alienated from the political sphere -- and that is the real problem with money in politics.

Sources:

† Calculation: Winning Senators needed to raise nearly $40,000 per day in 2016 race.

Pennsylvania Senate

To win, Toomey had to raise $30.8 million, which comes out to $14,070 a day over the course of a six-year Senate cycle. Including outside money complicates the analysis a little, but factoring in all money spent to support Toomey and oppose McGinty, his general election challenger, the total cash haul rises to almost $86.7 million. That's about $39,545 per day.

New Hampshire Senate

In New Hampshire, Hassan collected almost $18.6 million total, or $8,468 per day. Semantically, it's important to note that Hassan was the challenger, so she wasn't on the fundraising treadmill for 6 years in the way Toomey was in PA or her opponent, Ayotte, was in NH. With outside money included, more than $66.3 million went toward Hassan's victory, a total of $30,251 per day.