Aggregate Contribution Limits Promote Electoral Competition

Did the Supreme Court take the next Citizens United? The Court agreed to hear McCutcheon v. FEC, a case challenging the federal aggregate contribution limit — the total any one donor can contribute to all candidates, party committees, and PACs. Striking down this limit would once again uproot our nation’s campaign finance landscape. It would allow incumbents to gather seven-figure checks for their political parties, and pave the way for challenges to other limits.

Contribution limits are a critical tool for combating corruption, and the Supreme Court must uphold the law. But such limits are also critical for ensuring competitive elections — a hallmark of our democracy.

McCutcheon challenges the aggregate limit of $123,200, but it does not directly implicate the limit on what a donor can give to any given candidate (currently, $2,600). But candidates are very skilled at circumventing these limits when given an opportunity.

Everyone is familiar with the $50,000 per plate fundraisers common during presidential election years. These are possible, despite the $2,600 limit, because presidential candidates raise money through joint fundraising committees that disperse the funds among a variety of national and state party accounts. (In truth, the candidates do benefit from the lion’s share of the funds they raise.) Without an aggregate contribution limit, there would be extremely strong incentives for incumbents to solicit single checks totaling more than $1 million .

A ruling against aggregate contribution limits could easily pave the way for challenges to other contribution limits. The risk that McCutcheon poses is particularly serious amid increasing signals that members of both parties are forgetting the importance of contribution limits to the health of democracy. Last year, Gov. Pat Quinn (D-Ill.) signed into law a bill that lifts the state’s contribution limits if outside groups spend large sums in state elections. Florida House Speaker Will Weatherford (R-Wesley Chapel) is spearheading legislation that would increase the state’s limits by a factor of 20. And former Obama adviser David Axelrod recently called for the elimination of federal limits.

Each of these proposals to dramatically raise or eliminate contribution limits is rooted in justified fears about the increasing role of outside and non-transparent spending in elections since Citizens United. But the proposed policy prescription does not address the problem and would have serious side-effects.

Worse, research has shown that increased contribution limits lead to less competitive elections. The Brennan Center for Justice and George Mason University Professor Thomas Stratmann found that incumbents in states with contribution limits enjoy margins of victory 1.2 percent lower than those without any. The difference is more pronounced when one compares different levels of contribution limits among the states. According to Stratmann’s research, a contribution limit of $500 or lower reduces an incumbent’s margin of victory by 14.5 percent compared to states with the highest limits. And limits between $501 and $1,000 yield a 9.5 percent reduction in incumbent victory margin.

These findings may seem counterintuitive. Some argue that high contribution limits are necessary for challengers to quickly stockpile the resources to compete. But in fact, the opposite is true. It’s easy for incumbents to build imposing war chests when contribution limits are high. They have established fundraising networks that already helped them secure office. And special interests are eager to fund incumbent campaigns in order to reinforce their lobbying efforts.

Officeholders with well-funded re-election campaigns scare off potential challengers. The strongest opponents are likely to wait to mount a candidacy until a time when they are less disadvantaged — after a retirement occurs or a scandal or partisan wave weakens an incumbent. Without strong opponents, incumbents coast to re-election. Challengers may perform better in states with low contribution limits because, without a competitive advantage, incumbents are forced to engage in “grassroots fundraising,” amassing finances through thousands of small contributions rather than a handful of large ones. As a result, strong opponents are less likely to be dissuaded from mounting a rigorous challenge.

Although the data showing lower limits produce closer elections emerged from state races, contribution limits are likely even more critical for electoral competition in federal elections, which come with even higher price tags.

McCutcheon presents an opportunity for the Supreme Court to reaffirm the importance of contribution limits in preventing political corruption and to recognize their role in promoting electoral competition. The Court should adhere to firmly established precedent and uphold the aggregate contribution limit.