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The business world's role in making Washington work

Fiscal Times logo Fiscal Times 6/27/2017 Joe Minarik
U.S. President Donald Trump (C) participates in an American Technology Council roundtable at the White House in Washington, U.S., June 19, 2017.© REUTERS/Carlos Barria U.S. President Donald Trump (C) participates in an American Technology Council roundtable at the White House in Washington, U.S., June 19, 2017.

One of the strongest forces in today’s economy is the way Washington works — or, to be frank, doesn’t.

For the good of both their companies and society, business leaders need to understand why the policy process in Washington, D.C. is failing — and need to hold our elected representatives’ feet to the fire to fix it.

Our national politics has degenerated to the point where civic debate has become uncivil invective; analysis has been displaced by ideology; and vital public issues are not being solved, but rather stored for future partisan use.

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Business leaders cannot be silent when so much is at risk.

The breakdown of the policy process in Washington is a real threat to the foundation of America’s success. Our prosperity was built on broad agreement on the need to work toward consensus on public issues under widely accepted rules of behavior. If government cannot address the key, crucial issues of our time or even agree on what those key issues are, business — and workers and our entire economy – will suffer. And the system that cannot confront today’s challenges will surely lack the reserves of comity and trust to face unknown and sudden — and perhaps dangerous — crises.

There are fixable flaws at every stage of our political and policymaking process. Congressional redistricting aims blatantly to safeguard incumbents, which yields politically lopsided districts. The most extreme voters in both parties are thus empowered in primary elections. An ever more extreme Congress thrives on partisan rancor and disdains the necessary compromise on crucial public issues. Under the spell of this partisanship, congressional rules prevent serious debate and the consideration of meaningful alternatives. Ethics rules have been ineffective and poorly administered.

Business leaders can and must speak up about each of these issues. They must also lead the way on a more fundamental issue: the campaign finance system at the root of our current dysfunction.

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The cost of campaigning has increased markedly in recent years, and there is little that can be done to change that. To have competitive elections, candidates must be able to communicate effectively with the electorate, and that costs money. But for the health of our political system, we must make it easier for candidates to raise the funds needed to communicate effectively with voters and mount competitive campaigns without relying on special interests pursuing private agendas. Our campaign finance system must be built on the involvement of everyday citizens, who contribute with no intention of using their money as leverage for future preferential treatment.

The chief impediment to competition in federal elections is the prospective challengers’ lack of money or the ability to raise it. Improve the resources available to these potential candidates and they will less frequently be discouraged from running.

To that end, business leaders should urge Congress to establish a voluntary matching program of public funding. Individual contributions to congressional candidates should be eligible for matching subsidies. Candidates who choose to participate would receive as much as $6 in public money for every dollar received from individual donors, subject to a maximum eligible individual contribution, perhaps $200. Candidates would qualify by raising a threshold amount in small individual donations up to that eligible maximum.

Related: US Supreme Court Leaves Key Campaign Finance Restriction in Place

Total individual contributions plus the matching funds should be sufficient to finance fully the spending of all but the most expensive congressional campaigns. A formula could be created to take into account the media costs in particular states and districts, so that all House and Senate seats could be funded through this matching program.

The costs would be comparatively modest. If every House and Senate seat were financed with a six-to-one match, the public costs would be less than $2.25 billion per year at current spending levels (that is, less than $4.5 billion per election cycle). Funding the presidential race on the same terms and at the same levels would cost less than $1.5 billion per year (that is, less than $6 billion per election cycle). These costs would be financed through federal budget appropriations.

These sums would be an investment in government of, by and for the people. Citizens must understand that he who pays the piper calls the tune. Many might not want their tax dollars to pay for election campaigns. But would they prefer that all of us leave the “ownership” of campaign finance to the highly visible, big-dollar donors, who expect “a return on their investment?” And where would we expect that “return on investment” to come from, if not the taxpayers?

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Such a system would be constitutional and legal. Candidates can choose to accept an alternative funding source rather than the current system. The same penalties that apply to misuse of current campaign funds (there is at least one criminal case open right now) would prevent misuse of public campaign funds.

Why should businesses abandon the advantages they have under the current system? Business leaders who believe that they provide real value to their customers and investors understand that any political influence that they have today can be turned against them in the future. They have confidence that they can win in the market arena; they don’t want to risk their success in the unpredictable political arena.

Thus, business leaders gave crucial legal depositions to defend the McCain-Feingold bipartisan campaign reform law in its first court test, explaining how executives are shaken down by political candidates who implicitly threaten their companies with legal or regulatory pain if they don’t write big checks. Business statesmen have stood up for their country and provided their expertise and insight over and over in the past, and they can do so again. They can show the public at large that business stands for the public interest.

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Again, the causes of our current partisan malaise are many. All (including individual citizen responsibility) need attention. But revamping the campaign finance system in this way would both help alleviate the partisanship in Congress and help new candidates break through against entrenched extremists. The voting population is by and large moderate, but a small number of wealthy people with extreme views can play off of light turnouts in primary elections in gerrymandered districts to skew the composition of the Congress toward the ideological wings. Candidates, incumbents and challengers alike, must spend inordinate amounts of time “dialing for dollars” with such prospective big-money donors, and must then be responsive to their interests. For incumbents, that is time not spent on pursuing the public interest.

So such a matching program would broaden participation in the political system; increase the incentive for candidates to seek out small contributions; diminish the risk of corruption; and promote competition in federal elections.

In short, the problem in campaign finance is not too much spending, but rather too much dependence on too much money from interests seeking to advance private agendas. More individuals making comparatively small contributions would be healthy for democracy. If business speaks clearly to the American people, they will join in this effort. The agenda to make Washington work is long, but this core issue is the place to build traction and momentum. Making Washington function better can make capitalism function better.

Joe Minarik is senior vice president and director of research for the Committee for Economic Development and coauthor of Sustaining Capitalism: Bipartisan Solutions to Restore Trust & Prosperity

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