Senate Republicans' threatened filibuster has killed campaign-finance reform. Looks like its public financing of campaigns once again this year. The only question is the cost.
Our choice? Pay as taxpayers or pay as consumers. Which is the better deal? The numbers may surprise you.
Most kids learn about the three branches of government: "legislative" (Congress), "executive" (president) and "judicial" (courts). But Washington doesn't work through three branches. It works through dozens of sub-governments.
Sub-governments grow under rocks, away from the media's spotlight. They require an industry dominated by a few firms that grow rich with government help, whether through subsidies, price supports, tax breaks, government contracts, public land, bailouts or tariffs.
A sub-government's membership includes a small, incestuous collection of one industry's corporate and trade association executives, their lawyers, lobbyists and publicists, its trade papers' journalists, congressional sub-committee members and staff and the relevant agency's employees. They eat and play together, inter-marry, and protect each other.
Consider your tax dollars spent on shipping companies' subsidies. Economists say we get little in return. Just redistribution of wealth from the middle class to the rich.
President Lyndon Johnson, one of the most skillful legislative manipulators this century, wanted to cut those subsidies. I was U.S. Maritime Administrator at the time. But even Johnson couldn't beat the maritime subsidy sub-government. (Few since have even tried. Congress voted another $1 billion this year.)
Contributions to candidates are limited by law. Contributions to parties ("soft money") are not. Common Cause documented dozens of $100,000 contributors to George Bush. President Clinton raised $12.3 million at one dinner. Why would anyone contribute so much money?
The answer first came to me during President Nixon's Administration. Milk producers wanted a higher support price. The Department of Agriculture could find no justification. The producers gave Nixon $200,000. Shortly thereafter we all started paying $400 million more for our milk.
The math isn't too hard: $400 million divided by $200,000 means the milk producers got a 2000-to-one return on that campaign contribution. What a "return on investment"!
Look at the tax breaks, defense contracts, and other gold mines worked by sub-governments. Compare the benefits they get with the price they pay. A 1000-to-one return is not uncommon.
The mining industry contributed $17 million from 1987 to 1994 and received $26 billion from public lands in return.
Timber-industry executives contributed $6.9 million during the same period roughly the years the Forest Service was losing $7.2 billion selling them our trees.
ADM (whose chief executive was indicted, but acquitted, for a $150,000 contribution to Hubert Humphrey, and whose $25,000 check was found in Watergate burglar Bernard Barker's account) gave Bush $652,000 in soft money. Bush provided ADM an ethanol subsidy worth $3.4 billion.
Doctors kicked in $14 million over 10 years and got Gingrich to change the Republican medicare plan to eliminate billions of dollars in fee reductions.
Real estate developers gave $7.9 million to George Bush and the Republican National Committee and got back $2.5 billion on one little tax break.
UPS pays out $1 million a day in workers' compensation. What would it be worth to have its lobbyist write House legislation weakening safety standards? Enough to make UPS the No. 1 political-action committee contributor at $2.4 million.
Gallo has given over $1 million to Bob Dole's campaigns and foundation. Dole has returned to Gallo millions in inheritance tax savings, an agricultural subsidy program, and help with champagne labeling.
Nobody's Pure
Republicans may feel more comfortable with business. But Democrats want the same money. Nobody's pure. Gallo also gave President Clinton $50,000. And a small telecommunications company executive asked colleagues for $100,000 to "guarantee" Clinton's veto of a bill they opposed.
Campaign contributions are no longer the "man-bites-dog" story of the bribe, or special interest favor, as occasional system aberration. They have become the very system itself substituting the disproportionate influence of contributors for officials' search for "the public interest."
Any way we slice it, the 1996 federal campaigns are going to cost us about $1 billion at best and $1 trillion at worst. Which price will we pay?
We could pay about $4 apiece in direct federal funding of campaigns. That's $1 billion from us, and $1 billion for the campaigns.
Or we could end up paying $4000 each. That's what happens when we sit it out, and let America's wealthiest individuals pay the $1 billion. That's $1 trillion from us to get $1 billion for the campaigns.
The $3996 difference? That's what we'll pay in increased prices for food, insurance, gasoline, bank interest rates, and bills from doctors, telephone and cable-television companies, among others.
The choice is yours. Tell your elected officials you want federal funding of campaigns and pay $4, or stick with the present system and pay $4000. Which will it be?
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*Nicholas Johnson has watched the corruption of the political process as a three-time presidential appointee, candidate for the U.S. Senate and House, and party activist. He currently teaches at the University of Iowa College of Law.
[Note: Given the number, and nature, of the factual assertions in this piece, it was researched, and submitted, with supporting footnotes. The version above is designed as, and believed to be, an exact reproduction of the piece as it appeared. Op-ed pieces are not normally published with footnotes!
However, because the reader of this online version may also be interested in the supporting sources, the original footnotes appear below, preceded with a one-sentence quote from the text to which they were attached.
["Congress voted another $1 billion this year."] Christopher Drew, "Political Power Likely to Shield Ships' Subsidies," The New York Times, March 11, 1996, p. A1.
["Common Cause documented dozens of $100,000 contributors to George Bush."] See, "Bush's Ruling Class," Common Cause Magazine, April/May/June 1992, pp. 8-27.
["President Clinton raised $12.3 million at one dinner."] Jeffrey H. Birnbaum, "The Bucks Start Here," Time, June 24, 1996, pp. 26, 28.
["Shortly thereafter we all started paying $400 million more for our milk."] See, "Bush's Ruling Class," Common Cause Magazine, April/May/June 1992, pp. 8, 10.
["The mining industry contributed $17 million from 1987 to 1994 and received $26 billion from public lands in return."] Edward A. Chadd, "Manifest Subsidy," Common Cause Magazine, Fall 1995, pp. 18, 19.
["Timber industry executives contributed $6.9 million during the same period roughly the years the Forest Service was losing $7.2 billion selling them our trees."] Edward A. Chadd, "Manifest Subsidy," Common Cause Magazine, Fall 1995, pp. 18, 21; Steven T. Taylor, "If a Tree is Stolen from the Woods . . . Would the Clinton Administration Make Any Noise?" Washington Post, October 29, 1995, p. C2.
["Bush provided ADM an ethanol subsidy worth $3.4 billion."] "Bush's Ruling Class," Common Cause Magazine, April/May/June 1992, pp. 8, 16.
["Doctors kicked in $14 million over 10 years and got Gingrich to change the Republican medicare plan to eliminate billions of dollars in fee reductions."] Ruth Marcus, "Health Care PACs Give Freely," Washington Post, December 1, 1995, p. A25.
["Real estate developers gave $7.9 million to George Bush and the Republican National Committee and got back $2.5 billion on one little tax break."] "Bush's Ruling Class," Common Cause Magazine, April/May/June 1992, pp. 8, 21.
["Enough to make UPS the No. 1 PAC contributor, at $2.4 million."] David Maraniss and Michael Weisskopf, "OSHA's Enemies Find Themselves in High Places," Washington Post, July 24, 1995, p. A1.
["Dole has returned to Gallo millions in inheritance tax savings, an agricultural subsidy program, and help with champagne labeling."] Ruth Marcus, "Book Looks at Who Supports Candidates Financially And Why," Washington Post, January 12, 1996, p. A13. (The book referred to is Charles Lewis and the Center for Public Integrity, The Buying of the President.)
["Gallo also gave President Clinton $50,000."] See note above.
["And a small telecommunications company executive asked colleagues for $100,000 to "guarantee" Clinton's veto of a bill they opposed."] Ann Devroy, ""Letter Promises Veto Guarantee," Washington Post, September 22, 1995, p. A1.
["Any way we slice it, the 1996 federal campaigns are going to cost us about $1 billion at best and $1 trillion at worst."] See Geoffrey N. Smith, "Editorial: This $100 Million Race," Financial World, August 29, 1995, p. 6 (predicting $200 million for the 1996 presidential race), and Guinness Book of Records (1996), p. 437 (citing the Federal Election Commission report, April 28, 1995, that $724 million was spent on the 1994 House and Senate races ($318 million for the Senate, $406 million for the House)). Jeffrey H. Birnbaum, "The Bucks Start Here," Time, June 24, 1996, pp. 26, 28 (an estimate of $1.5 billion for 1996 federal campaigns).