Archive for March, 2013

The latest challenge to McCain-Feingold: McCutcheon v. FEC

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A recent article by in the Huffington Post by Jay Pinho alludes to the thorny spot that progressives have found themselves in vis-a-vis campaign finance rules, ever since the Supreme Court decided the Citizens United case in 2010.  He discusses the recent victory of Robin Kelly the IL-2 special primary election, and the instrumental role that Michael Bloomberg played in Kelly’s electoral success.  Bloomberg flooded the race with money in order to make good on his promise to support gun control advocates.  The point he makes is this: how do Democrats celebrate these progressive victories, while at the same time, work to reverse the rules the allowed them the power to get their message out in the first place?

Pinho also mentions the frustration felt among progressives in knowing that the Supreme Court has the potential to further roll back campaign spending rules when it hears the McCutcheon vs. FEC case in October.  He states, “in conjunction with the Court’s notorious Citizens United v. Federal Election Commission decision from 2010, which lifted the ban on corporate expenditures and led to an explosion of outside spending during last year’s election campaigns, such a ruling in McCutcheon would augur a decisive transformation of American electoral norms — from “one person, one vote” to something approaching ‘one dollar, one vote’.”

The McCutcheon case challenges the constitutionality of individual aggregation limits, which refer to the maximum amount that one individual can contribute to parties, PACs, and candidates during any two year election cycle.  For the 2013-2014 election cycle, this amount is $123,200.  Of this amount, no more than $48,600 can go to candidates; the remainder must go to either PACs or party committees.  This limit should not be confused with the maximum amount that candidates are allowed to receive for their campaigns, which remains unchallenged, and at $2600 per election.  If the Supreme Court sides with McCutcheon, then this limit will be abolished, and individuals will be free to contribute the maximum allowable amount to as many candidates as they choose.   Thus, the case can perhaps be better  understood as an attempt to abolish the limit on the number of candidates individuals can support, rather than the amount of money they can spend per se.

There are several reasons that progressives should take pause before automatically lambasting all individuals, organizations, or proposals to alter extant campaign finance regulation.  First, the practical effects of eliminating individual aggregation amounts is likely to be minimal.  At the current limit, individuals can “max-out,” in other words, contribute the maximum amount of $2600 to both the primary and general elections of a particular candidate, to no more than nine congressional contenders during a two year period.   Of the very small percentage of Americans that contribute to congressional elections at all, an even smaller amount max-out to any one candidate.  The number of individuals who max-out to nine candidates, and exhaust their $48,600 allowance, is minuscule in proportion.

Second, if candidates are to become less reliant on Super PACs and other outside groups, then measures that make it easier to raise money in a transparent way, and in accordance with contribution limits, could be a beneficial thing.  It is impossible for one organization, party, or even Congress, to control the political messages that make it to the airwaves.  What these organizations can control is who is accountable for the messages that are made, and their level of transparency.   Unlike ad hoc organizations like Super PACs, elected officials and candidates are accountable for the statements they make and their legitimacy is dependent upon it.  Therefore measures that empower candidates relative to outside organizations perhaps deserve a second look by progressives that desire an improved campaign finance system.

 

What will it cost to win back the House?

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By Nick Daggers
Follow Nick on Twitter @nickdaggerscfo 

With the 2012 election in our rearview mirror we are all looking down the road to 2014. After a successful cycle the Democrats gained eight seats in the House but are still 18 seats short of the majority. There are plenty of race trackers and analysts that can offer their thoughts on which seats will be in play and why. I would like to offer a quick demonstration of what we can expect to see spent in a race for the majority.

A good case study to establish an estimate for 2014 spending is to look at the six (8, 10, 11, 12, 13, 17) competitive races in Illinois from 2012. According to the Center for Responsive Politics in the five districts won by the Democrats the campaigns and their allies spent a total of $20.5m, or an average of $4.1m per Democratic pickup.

The Illinois’ 11th and 17th Congressional Districts provide a microcosm of districts across the country that Democrats must win in order to take back the House. In both cases the DCCC was able to help recruit strong Democratic challengers (which will be key again in 2014) to take on popular Republican incumbents. In order to take back the house in 2014, Democrats will likely have to defeat at-least 20-25 Republican incumbents.

In the IL11 Bill Foster defeated Judy Biggert. Foster and his allies had to spend $4.88m in order to secure victory. The IL11 covers a diverse swath of the Western Suburbs of Chicago. Meanwhile two hours to the west is the IL17. In this district, Cheri Bustos defeated one-term Congressman Bobby Schilling. Bustos and her allies had to spend just shy of $4.7m to win.

While the races had many similarities they also had one glaring difference, they both fell into two very different media markets. The IL11 is in the Chicago media market, the third largest in the country, and the IL17 covers the Rockford, Quad Cities, and Peoria media markets, of which only the Quad Cities are a top 100 market.  Since both districts cost about the same to win it helps demonstrate that no matter the media market, Democrats can expect to spend about $4.75m per Republican incumbent they can defeat.

The Democrats are looking at needing to spend $120m just to defeat Republican incumbents. That number does not include the 201 seats we will have to defend and the 100 plus seats that are safely in the Republican column, which can probably be estimated at-least another $200m.

Over the next 18 months we will see exactly how these races play out and if the Democrats and their allies can raise to take back the House. While we won’t know that final number for months to come, we can already guess that just like the past three election cycle we should all expect it to be another record year for campaign spending in the battle for the Speaker’s Gavel!

 

Nick Daggers is a Vice President of Development for CFO. He has spent the last five years working as a fundraiser for political campaigns and non-profits.

Helping Rhode Island Crack Down on a National Problem

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For many of us, Payday Loans are an unknown financial instrument. While many have a general understanding of what pawn shops and check cashers are, payday lenders are a different animal.

Rhode Island’s population is barely over a million and yet nearly 200,000 of these loans are taken out yearly. Payday loans are short term, high interest loans. They are capped at $500, due in two weeks and carry an APR of 260%. For many, these loans are the not the solution to a short term financial crises but rather cover ordinary living experiences. In fact, the average borrower takes out 8 loans per year.

CFO Consulting Group is proud to be the public affairs team fighting for the Rhode Island Payday Loan Reform Coalition. A great coalition is fighting back against predatory lending in Rhode Island, but there are similar efforts underway across the country. Additionally, there is an effort to crack down on the enabling role the big banks are playing for the industry.

Recently the New York Times covered how the nation’s biggest banks, including Bank of America and Wells Fargo have proved to be willing partners allowing the payday lenders to continuously debit accounts, racking up big overdraft fees along the way. In response to this coverage JP Morgan pledged to change its practice. CFO is looking forward to seeing that change, and change in Rhode Island.