H.R. 1 and Public Financing

I mentioned the other day that H.R. 1 would revolutionize American redistricting by requiring congressional maps to be designed by independent commissions. The bill would spark equally radical change in how congressional campaigns are financed, by creating two separate public financing programs. The first of these, dubbed “small dollar financing,” would match private contributions up to $200 with six times more public funds. A $200 donation to a candidate, for example, would trigger the release of another $1200 to that candidate. To qualify for the program, a candidate would first have to receive 1000 small dollar contributions or $50,000 in such contributions. A qualifying candidate could be disbursed no more than half of the average expenditures of the twenty winning House candidates who spent the most money in the previous election.

H.R. 1’s second public financing scheme, called “my voice vouchers,” would be a pilot program in three states for two elections. Every eligible voter would be able to request a $25 voucher. The voter would then be able to allocate portions of that voucher in $5 increments to congressional candidates. At the conclusion of the trial period, the FEC would submit a report to Congress evaluating the program’s operation and effectiveness.

I think H.R. 1 is right not to mandate publicly financed vouchers nationwide. Only one jurisdiction has adopted such vouchers—Seattle—and for only one election to date. More information about how many voters use vouchers, to whom they allocate the funds, and how candidates solicit contributions, would plainly be helpful. I also think the vouchers should be made substantially larger (say $100) and provided automatically to voters (not upon request). Bigger vouchers would do a better job crowding out private campaign funds—and with them the corruption and policy distortion they produce. Opt-out rather than opt-in vouchers would serve the same goal: making it more likely the vouchers would be used, and thus reducing candidates’ dependence on private financing.

While H.R. 1 seeks more data before imposing vouchers throughout the country, it’s ready to implement small dollar financing at once. But here too, I think some caution would be advisable. Only a few jurisdictions have experimented with multiple-match public financing (most notably, New York City). Small donors may also be preferable as funding sources to very rich individuals or corporations, but they’re far from ideal. They’re older, whiter, wealthier, more ideologically extreme, and more male than the electorate as a whole. They thus threaten to skew policy away from the views of the median voter. And if H.R. 1 makes small dollar financing permanent and nationally applicable, while vouchers are relegated to a pilot program, then it’s likely the former will become the default and the latter will end up a mere curiosity. This might be the best approach—but it might not be. To avoid prejudging the debate, H.R. 1 should limit the duration and geographic scope of small dollar financing as well. Then both it and vouchers could be assessed at the end of the trial period.

And while I’m on the subject of public financing pilot programs, let me throw out one more idea: providing parties with large grants (say $25 per eligible voter in a state, multiplied by a party’s share of the presidential vote in that state in the last election), which could then be spent directly or distributed to congressional candidates. Giving parties access to public funds on this scale would significantly increase their influence. To the extent that parties are more responsible and moderate than other campaign funders (like individual donors and corporations), this greater clout could be salutary. Making parties the key actors would also solve the “Goldilocks” problem of enabling publicly funded candidates to run viable campaigns without wasting the government’s money. Parties would have every incentive to deploy their resources efficiently to win as many seats as possible.

The risk with a series of pilot programs, of course, is that after they have run their course, the political will to make any of them permanent will have disappeared. This concern certainly applies to H.R. 1; if it ever becomes law, it will be in a reformist moment that is highly unlikely to endure for a subsequent decade (the length of the bill’s trial period for the vouchers). A potential solution is for Congress to tie its hands in advance: to commit to nationalizing whichever policy shows the most promise during the experimental stage. The FEC could evaluate each pilot program along criteria like ease of use, popularity, reduction in corruption, and reduction in policy distortion. The policy with the strongest record could then go into effect nationwide without any further congressional action. A single reformist moment could thus be leveraged first to gain information about different public financing options and then to adopt the best of them.


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