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Should Politicians Accept Out-of-State Money?

A few months ago, I asked why Max Baucus accepted so much money from health-care industry players. He's a dominant force in Montana, doesn't have to run for reelection until 2014, and would gain a lot of legitimacy in the health-care debate if he simply rejected the unnecessary funds. Andrew Samwick ran across that post, and has a question of his own.

Why should it be legal to make a political contribution to a candidate who is not running for an office that represents you as a constituent? I do not think it should be. Imagine how different this senator's incentives would be if he could only raise money from the residents of Montana as individuals and not from organized interests.

Putting aside the Buckley v. Valeo concerns, would this be a good idea?

It would rid the system of one of the incentives for hoovering up industry money: Donating to other members of your party. Baucus doesn't keep all those dollars. A fair chunk of them go to the Democratic Senatorial Campaign Committee, and assorted other party venues. This produces a lot of pressure for the politicians who can raise industry money to do so. After all, if one party is pulling in that cash to fund its campaigns and the other isn't, the other is going to lose.

But it would also increase one of the system's other problems: Parochialism. Baucus might represent Montana, but as Chairman of the Finance Committee, he's legislating on behalf of America. If he wanted to anger some of the conservative interests in his state and take a more national view, he could, in theory, raise national money to fund his reelection campaign and defend himself against state-based interests. Removing that option seems likely to ensure total capture by local powerbrokers, which may indeed be worse, or at least more incoherent, than capture by national interests.

By Ezra Klein  |  September 29, 2009; 5:37 PM ET
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Banning out of state money might have some interesting side effects.

We might get a race to the bottom. In the same way that credit card companies incorporate in Delaware to get the most flexible laws, we might see companies incorporating in Montana because they have the cheapest Senators.


Posted by: zosima | September 29, 2009 6:04 PM | Report abuse

Should Politicians Accept Out-of-State Money?

I'm fine with not allowing out of state money as long as liberals can't accept it too. Exactly where do you draw the line there though? Would progressive groups have to give back money for the competitor for Joe Wilson and likewise conservative groups who gave money to Mr. Wilson? Just make sure campaign finance reform can't regulate just those with an (R) in front of their name. Double standards are really a problem.

Posted by: visionbrkr | September 29, 2009 6:05 PM | Report abuse

Plus, look at how undemocratic the senate is. Wyoming gets more than 10 times the voting power in the senate than it would have based on the number of people who live there. You could get some terrible unfairness and inefficiency if senators felt they only had to consider the interests of the people in their state and not be concerned with what was best for the country as a whole.

Posted by: RichardHSerlin | September 29, 2009 6:13 PM | Report abuse

What would stop out-of-state people from funneling funds through in-state groups or individuals? It would be must more effective to just ban private money from political campaigning completely, but obviously that's not going to happen any time soon.

Posted by: bluegrass1 | September 29, 2009 6:46 PM | Report abuse

I can think of many places to do campaign finance reform that I'd start with before attempting to restrict contributions to in-state sources.

First, the SCOTUS created the idea that corporations are PEOPLE and have RIGHTS. I don't know if a Congressional law could overturn this - it would certainly require lots of other changes in a multitude of Federal laws, but there lots of other pernicious effects of the status quo. Justice Sotomayor commented on this in recent oral arguments, I hope straining the pot to remove some toxic lumps.

Then, PACs that aren't just the accumulations of voters should be restricted from contributions and electoral/issue advertising (somehow) targeting corporate/biz PACs (and labor PACs so the GOP crazies go zombie/mummies from the grave on us).

Lastly, I'd make committee chairs in the house and senate all electable by the majority of the entire caucas every YEAR (not every session of two years), and forbid more than 4 years as chair of a particular committee. The Senate, in particular should not be the House of Lords. Chairs should be restricted from receiving ANY PAC contributions (and corporate contributions per item 1 above).

The congress must be far closer to the people, as the founders intended.

To show the extreme length I'd go, I'd also favor making the Senate representation by state vary within a range dependent on population (say, 2 to 6-10).

And, of course, I'd forbid by law any voting in Congress that required more than a majority to pass.

In regard to the proposal outlined by Ezra, the negatives in the current environment far outweigh the positives.

Posted by: JimPortlandOR | September 29, 2009 8:46 PM | Report abuse

Oh, and age limits in the Congress should be put on: the Senate is FULL of senile old fools that can't even remember what they said yesterday and have no capacity to understand the issues. Seventy of age sounds like the right number.

Posted by: JimPortlandOR | September 29, 2009 8:49 PM | Report abuse

You've all forgotten the most important question of all.....and that would be the constitutionality question.

Posted by: WrongfulDeath | September 29, 2009 9:30 PM | Report abuse

Setting aside other possible issues with this, Ezra's concern that Congressman could be "captured by parochial interests" seems a bit wrong to me. The Congress is SUPPOSED to be captured by parochial interests, that's the whole theory of representative democracy, right?

Posted by: CynicalJerk | September 30, 2009 11:38 AM | Report abuse

The best way to deal with out of state money is to free politicians from all large donations with an opt-in public campaign finance system. There is legislation now in Congress, the Fair Elections Now Act, which does just that and, I believe, passes constitutional muster even under Buckley v. Valeo.

The legislation allows for out-of-state donations, but provides multiple matches for small in-state donations and lump sums for reaching certain thresholds of small in-state donations (necessary to ensure that only candidates with some degree of significant support receive public funds).

I have to comment that I don't know why a post above turned Ezra's post into a partisan issue, stating that liberals would have to be barred from taking out of state money too. The post was, after all, about a Democratic senator. There was no indication of any "double standard" in Ezra's post, and I have not heard of such by anyone discussing the particular issue of out of state funds or campaign finance reform generally.

Posted by: dasimon | October 1, 2009 12:14 AM | Report abuse

dasimon's comment makes a lot of sense.

Regardless, the enforcement side of the equation will be a beast. If you limited donations to a primary residence that would probably be one way to sniff out problems, and it would close one possible loophole wherein companies or lobbies set up shell orgs in targeted districts/states to circumvent restrictions (e.g. by limiting to a primary residence you'd also block a person's ability to give money in multiple districts). More than anything I think eliminating soft-money, PACs, and reducing donation limits is likely to get a lot more mileage.

In terms of the Constitutional issues, a lot hangs in the balance at this point with the Citizens United SCOTUS ruling.

Posted by: JPRS | October 3, 2009 6:45 PM | Report abuse

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