We have been told repeatedly that the 2004 Presidential election witnessed the rise of the small, individual donor. This is certainly correct. Overall, in the 2004 Presidential election, small, individual donors giving $200 or less pumped in $205M to the election between ten candidates: Bush, Kerry, Dean, Edwards, Clark, Gephardt, Lieberman, Kucinich, Graham and Nader. By comparison, in the 2000 Presidential cycle, small individual donors giving $200 or less put $119M into the bank accounts of fourteen candidates: Bush, Gore, Bradley, McCain, Buchanan, Forbes, Alexander, Dole, Bauer, Nader, Keyes, Hatch, Browne and Quayle. This is a substantial, if not an astonishing, 72% increase in small donations to Presidential candidates from one cycle to the next.
However, what I feel has been significantly overlooked about donor demographics in the 2004 election is that despite this rise in small donations, large donors were actually able to slightly increase their share of overall individual donations. In 2000, the fourteen candidates I listed above collected $240M in donations of more than $200, making such contributions 66.8% of all individual donations to Presidential campaigns. In 2004, the ten candidates I listed above collected $426M in donations of more than $200, making such donations 67.5% of all donations to Presidential campaigns in that cycle. In the 2004 cycle, money from large donors to Presidential campaigns thus actually increased at a slightly faster pace (77.7%) than money from small donors to Presidential campaigns (72.3%).
Why did this happen? The main reason is obvious: from 2000 to 2004, the maximum contribution limit from an individual donor to an individual campaign increased from $1,000 to $2,000. With this expanded limit, large donors were basically able to instantly double the amount they can donate, thus effectively canceling out the rise in small donations. A second important reason for this, is the often overlooked role of the small donor toward the end of the 2000 cycle was overlooked. Both Nader and Buchanan raised far more in small donations than they did in large donations, as did, somewhat surprisingly, Bill Bradley, Alan Keyes and Gary Bauer. Further, Bush already received around 20% of his donations in 2000 from small donors, while both Gore and McCain both neared 30%.
The combination of a much larger than perceived small donor base in 2000 with the doubling the individual campaign contribution limit combined to make the small donor revolution of 2004 more than a little bit overhyped, at least in terms of Presidential campaigns. In all likelihood, the impact has been far greater upon the party committees, but that is the subject of another post. The point of this post is to argue against one of the most dangerous proposals to new campaign finance regulation that, like the increase in the individual contribution limit, would serve as another, hidden way that the power of large donors would be further increased. Specifically, as part of the new wave of campaign finance regulation that is currently being reviewed by Congress, there is a proposal to entirely remove the maximum individual donation limit for a campaign cycle, which currently stands at $100,000. the Washington Post editorial board takes up this issue today:
As the Rules Committee marks up the 527 Reform Act, lawmakers must beware of two rear-guard attacks that could severely undermine its usefulness and jeopardize Congress's ability to pass reforms. One involves the dangerous notion that the 527 issue should be addressed not by reducing the size of the checks these groups can collect but by easing contribution rules for those who play within the federal election system. This misguided approach is embodied in a House proposal, sponsored by Rep. Mike Pence (R-Ind.) and Albert R. Wynn (D-Md.), which -- though it's titled the 527 Fairness Act -- wouldn't actually do anything about 527s. Rather, it would remove the overall limit (currently just over $100,000) on how much individuals can give to federal candidates and political parties in the course of a two-year election cycle. Instead, individuals would be free to give up to $1,160,200 to a single political party and $2 million or more to federal candidates per election cycle. Even worse, elected officials or candidates could solicit such mega-donations. One of the most impressive developments of the 2004 campaign was the emergence of large numbers of small-dollar donors. Changing the law to enable more big givers to give more big checks is unwise and unnecessary.
Just like the doubling of the individual contribution limit to an individual campaign, if the individual contribution limit to all campaigns in a single cycle were removed, it would effectively cancel out, or even significantly reduce, the potential influence of small donors in federal campaigns. If wealthy donors are able to spread the newly raised $2,100 (yes, it is now $2,100, up from $2,000) contribution limit to an individual campaign to as many campaigns as they want, the need for candidates to rely upon small donors would be significantly reduced.
It is often said that liberal democracies offer reform in order to prevent revolution. Reform may be acceptable, but the mirage of reform certainly is not. We need to stop accepting the spoonfed lie that currently pervades the national political discourse about the rising influence of small donors in federal campaigns. With every rise in small donors, there are those who work to pass, and succeed in passing, campaign finance laws that effectively cancel out those rises, or even make small donors less influential than before. The Pence-Wynn bill is one of those proposed laws, and it must be defeated if small donors are ever to realize a greater amount of influence within Presidential campaign.