Updated: Feb 21, 2020
Almost one hundred years before the Supreme Court’s 2010 Citizens United decision, Supreme Court Justice Oliver Wendell Holmes, Jr., gave the clues to reforming campaign finance laws. He proposed the First Amendment prohibits Congress from stopping speech. He expected citizens to counter false and erroneous speech with more speech. Congress can use that method to reform campaign finance consistent with Citizens United and the First Amendment. By correcting market failures in the marketplace of ideas, Congress can encourage best ideas and candidates, instead of the best fundraisers, will rise to the top.
Citizens United allowed corporations and unions to advocate for candidates.
In Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), the Supreme Court upset the campaign finance balance. Among other details, Congress had prohibited corporations and unions from using general treasury funds for electioneering or for advocating for or against a candidate. 2 U.S.C. § 441b. In Citizens United, the Supreme Court held that provision violated the Constitution. It held that the First Amendment protects corporations’ and unions’ political speech as strongly as it protects natural persons’ speech.
Vitriol from the left has raised vitriol from the right. The political left sees a risk that corporations run by conservatives will outspend unions run by liberals, and that the money will change the election results. The political right sees the same advantage and defends it as increasing freedom. When President Barack Obama criticized the Citizens United Decision for opening the floodgates to corporate spending on politics at his 2010 State of the Union address, Supreme Court Justice Samuel Alito mouthed “Not true.”
Senators John Tester (D-Mont.) and Chris Murphy (D-Conn.) even proposed amending the Constitution to ensure that Congress could regulate corporate expenditures. That step would present significant risks for unexpected outcomes. The United States has never before amended the First Amendment. That does not mean that everyone always agreed on how to interpret the amendment; it only means the Supreme Court’s interpretations persuaded enough people to deflate attempts to complete the rigorous amendment process.
Citizens United Provided Breadcrumbs for Further Reforms.
The jury is still out on whether super PACs make any clear difference in election outcomes. Regardless of whether Citizens United advantages one party, its text has revealed new avenues for broadly reforming campaign finance. Writing for the Supreme Court, Justice Anthony Kennedy specifically recognized that Congress may design the remedy, as long as that remedy did not restrict speech. The Supreme Court sought to “entrust the people to judge what is true and what is false.”
In that statement, Kennedy was referring to the marketplace of ideas. Justice Holmes first conceived of that concept in 1919: “the ultimate good desired is better reached by free trade in ideas—that the best test of truth is the power of the thought to get itself accepted in the competition of the market, and that truth is the only ground upon which their wishes safely can be carried out . . . .” Abrams v. United States, 250 U.S. 616, 630 (1919) (Holmes, J., dissenting). In other words, the First Amendment often prohibits the government from stopping speech. Instead, it allows citizens to cure false speech with more speech. The stronger, more accurate ideas will gain traction and will prevail in competition against false ideas.
Congress could fund more speech to undermine the competitive advantage.
The marketplace of ideas concept presents a new solution to campaign finance reform: the United States could fund more speech directly to reform campaign finance. Candidates need some money for their operations; they raise exorbitant sums only to outraise their opponents and thereby to obtain a competitive advantage in advertising dollars. Indeed, campaigns spend up to 80 % of their budgets on advertising. If voters see candidate A’s advertisements twice as often as they see candidate B’s advertisements, candidates expect to increase the chances the voter would vote for candidate A.
Congress could erase that competitive advantage. It could pick a fundraising number, like $1 million for a House of Representatives member, for example. For each dollar any candidate raises beyond $1 million, the United States could fund that candidate’s opponents by one dollar. An appropriate minimum fundraising threshold would still screen out the candidates without sufficient support or drive to mount a viable race. All candidates will seek to raise that $1 million, but no one will have any incentive to raise more.
If candidate A insisted on raising millions above the threshold, the time she spent raising that money would put her at a competitive disadvantage. Candidate B would automatically receive that money to spend on advertisements, but could spend her time on other campaign activities—like talking to voters or generating new speech content and ideas on blogs or twitter.
Beyond simply balancing candidates’ speech, this system provides other benefits. Congress could still set the threshold in different places to account for cost of living or to determine how much time it would want the candidate to spend on fundraising. This system would also undermine the reciprocity that elected officials give to larger donors. The candidate would receive no benefit from the larger donors; he would receive benefits only from the earliest donors who supported her candidacy when no one else did.
One may ask how this system would handle third-party, non-candidate advocacy. To the extent third parties campaign against candidates, Congress could fund the candidate directly or set up a second, equal bucket for counter-third-parties to use. Because Congress would be using its power of the purse, the Supreme Court would give it broad authority to define the rules for when to fund campaigns affirmatively.
Some might fear that spending money equalizing candidates’ war chests would create a huge, new source of entitlement spending. That fear would not likely come to pass. This system would undermine the incentives so Congress would likely have to spend little, if any, money funding more speech. Candidates would have little incentive to spend time raising money; and citizens, corporations, and unions would have little incentive to contribute money once a candidate reaches the threshold. They would be pouring their money into a hole as the government matched it.
Advance our Democracy.
Because the Supreme Court has so completely rejected Congress’s attempts to turn down the volume knob on speech, it would not likely stop Congress from turning up the knob by equalizing the volume of speech. When candidates have the same resources, the marketplace of the ideas will operate most powerfully to bring forth the most compelling candidates and ideas to propel our democracy into the future.