Update 646 — The Political Economy, 2022
One Step Closer to One-Dollar, One-Vote
The massive sums raised, spent, and required by candidates for Congress to run are setting records, yet dwarfed this cycle by the amounts wealthy individuals and corporations are spending on their behalf. OpenSecrets is predicting over $9.3 billion will be spent on this year’s federal midterm elections, exceeding 2018’s record-breaking $7.1 billion by almost a third.
So few races are competitive that the smart money all piles into those few. The result, if you live in a media market that reaches a competitive district, is ad inundation and factual disinformation. Follow the money to find your majority, truer now than ever. What is wrong with the economy of the political system and what can be done about it? See below.
Our thoughts are with Paul and Nancy Pelosi following the attack at their home early this morning. Best wishes to them and good weekends to all…
Third quarter FEC reports show strong fundraising by both individual Democrats and the party’s national committees. The DCCC outraised and outspent its Republican counterpart this cycle. In the third quarter, the DCCC brought in $56.5 million compared to the NRCC’s $42.3 million. Even in the month of September alone, the DCCC reported receiving $27.5 million, outpacing its Republican counterpart by over $10 million. The DCCC’s receipts from 2021 and the first three quarters of 2022 are on par with its total receipts from the last midterm cycle; the committee is on track to outperform its fundraising from the previous midterm elections. While the NRCC has been falling behind the DCCC this cycle, it has been outperforming its own fundraising from 2017-2018, when it raised only $205 million compared to this cycle’s $262 million.
On the Senate side, the fundraising gap is a bit tighter. While the NRSC has outraised the DSCC during this cycle as a whole, last month’s numbers showed the DSCC bringing in nearly $28.8 million, a number that just barely edges out the NRSC’s $25 million. Both parties’ Senate campaign committees have been outpacing their fundraising from the 2018 cycle – the DSCC’s $148 million and the NRSC’s $151 million in total receipts for 2017-2018 have both already been well surpassed by their receipts from 2021-2022.
Party Fundraising in the 2022 Midterm Cycle
Source: FEC (As of 10/26/22)
Top Six House Fundraisers (2022 cycle):
- Nancy Pelosi (D)
- Kevin McCarthy (R)
- Katie Porter (D)
- Adam Schiff (D)
- Steve Scalise (R)
- Dan Crenshaw (R)
Top Six Senate Fundraisers (2022 cycle):
- Raphael Warnock (D)
- Mark Kelly (D)
- Val Demings (D)
- John Fetterman (D)
- Tim Ryan (D)
- Catherine Cortez Masto (D)
… Eclipsed by Outside Spending
Apart from campaign and party fundraising there are several other sources of money influencing November’s election. Since the Supreme Court decided Citizens United in 2010, outside money has been flooding our elections. Over $2 billion has been spent by 501(c) groups since that opinion, with the most of it coming from unseen donors. Independent expenditure committees are making large investments in races across the board, most notably for Republican Senate candidates. 501(c) groups do not need to disclose their donors so long as advertisements are deemed issue advocacy. The opacity offers a means for wealthy individuals or foreign interests to influence elections and voters are none the wiser.
The top 50 donors have contributed over $1.1 billion in this cycle lifting up political committees and other outside groups. Eight out of the top 10 donors, like Elizabeth and Richard Uihlein, Kenneth Griffin, and Jeffrey Yass, supported Republican PACs, contributing a total of $337.3 million. Big Democratic donors like George Soros and are making substantial contributions to Democratic outside groups but don’t reach the scale of Republican investments.
Outside groups have immense influence over our elections, running ad after ad boosting their preferred candidate and attacking their opponent. This has been especially prevalent for the GOP this cycle. Eighty-six percent of the money going towards GOP Senate TV ads are coming from outside groups, compared to only 55 percent for Democrats.
Republican donors are making up for what they lack in campaign resources and in quality candidates. Using campaign dollars, candidates can run ads at lower rates and spend less for the same amount of ad time. Democrats are more heavily relying on campaign funded ads, giving them an advantage there. However, outside groups are pumping in funds for ads that uplift Republicans.
Record amounts being spent on TV ads in competitive Senate races
The sheer scale of outside spending in the fight for the Senate majority is unprecedented. In Ohio, outside groups like Mitch McConnell’s Senate Leadership Fund Super PAC are spending more to back Republican J.D. Vance than is being spent overall to support the Democrat, Tim Ryan. Ryan raised $17.2 million in the third quarter while Vance only raised $6.9 million. Outside PACs have poured over $70 million in the race for Vance giving him an advantage as evidenced by polls. While this could mean Vance needs all the support he can get, Democrats struggle with the sheer amount of outside ads being levied against them.
Priorities for Reform
The exorbitant amount of spending this election cycle is an issue that must be addressed. As long as outside groups are allowed to flood the market with no transparency or oversight, we’ll continue to see election spending rise. Despite this, election spending’s influence continues to decline as partisanship increases, decreasing the marginal value of a campaign contribution. While we might struggle to overturn Citizens United with a conservative SCOTUS, there are steps we can take to make funding elections more transparent and equitable.
There are several proposals that would enhance the power of small donors and level the playing field with the ultra-wealthy, who have an outsized impact on our elections.
- Small Donor Matching Funds: The small donor matching program, proposed in the Freedom to Vote Act, would match campaign contributions under $250 at a rate of 6-to-1. This program would boost the voices of everyday people and lift up more diverse candidates as well.
- Banning Foreign Corporate Contributions: While foreign individuals cannot contribute, their companies can. There are several proposals in Congress that would put an end to the loophole that allows foreign-owned or funded companies to contribute to American elections, banning contributions from companies with even a small percentage of foreign ownership.
- Prohibiting Corporate PACs: While corporations aren’t allowed to donate directly to federal campaigns, they can set up PACs. Prohibiting corporate PAC contributions will lessen the influence of corporations on our elections, returning the power to the people.
- Democracy Dollars: Giving registered voters vouchers they could give to candidates would amplify the voices of underrepresented groups and make it easier to run for office. In Seattle, voters are given four $25 vouchers. Candidates who are eligible to receive vouchers agree to limit their campaign spending and big dollar donations.
With all the dark money influencing this cycle, there needs to be, at the very least, transparency on where that money is coming from.
- Strengthening the FEC: Empowering the Federal Election Commission to move past dysfunction will ensure current campaign finance law is enforced.
- The DISCLOSE Act: This bill would require any sort of advocacy group that runs ads to influence elections to disclose any contribution above $10,000. This legislation would shine a light on where big sums of dark money are coming from. (After being brought up in the Senate last month, it was struck down on a procedural vote with all Democrats voting in favor and all Republicans voting against.)
- The Honest Ads Act: A part of the Freedom to Vote Act, this would require political ad buyers to report expenditures and donors. Guiding more transparency and accountability for the incessant ads at this point in the cycle.
These reforms would make our campaign finance system more equitable, increase transparency, and lessen undue influence from wealthy, corporate, and foreign influences. Enacting these reforms into law will not be an easy feat. There once was bipartisan support for campaign finance reform in Congress, but the Democrats alone — and not all Democrats — are willing to fight for reforms supported by a large majority of Americans. If Democrats do not retain control of Congress, there will not be an opportunity to pass these reforms, but rather a need to protect such voting rights and campaign finance rules as we currently have. We can expect to see the cost of elections rise higher and higher with more outside groups with unlimited funds influencing the democratic process otherwise.