Why the Democrats should pass campaign finance reform in ‘09

My friend Nelson Pavlosky and I were watching Larry Lessig’s speech at the National Conference for Media Reform — a barn-burner refrain of his recent talks on corruption. Nelson mentioned that Lessig has been affiliated with the Obama campaign, and wondered whether this suggested campaign finance reform (such as public financing) would be an early priority of an Obama administration — especially given that the campaign is opting out of public funding and is basically raising money hand over fist.

My gut reaction was: probably not. Obama will use his honeymoon and early political capital on popular priorities like the Iraq war and health care, I figured. But as I thought about it more, I realized there’s a major political argument for backing a process reform like campaign finance in the first two years of an Obama administration.

First, campaign finance reform may not be as popular as ending the war, but it reinforces his image and echoes the message of his campaign (“change”).

Second, process reforms put Obama’s stamp on the party and Congress. We know this is important to Obama — see his recent move to ban the DNC from accepting lobbyist and PAC money. Plus, process reforms are a harder sell with party insiders and elected officials than with the general public, so acting early will let Obama capitalize on the early indebtedness of Members who rode his coattails to election or re-election. And we’ve seen that the leadership of both houses has at least some stomach for process reforms: ethics reform was one of the six planks of the Democrats’ “New Direction for America” platform in 2006.

Most importantly, the first two years of an Obama administration may be the only chance for Democrats to move campaign finance reform — especially if they don’t. Here’s why.

Midterm elections are historically bad for the President’s party, when the same party controls both branches. I’ll make the case that 2002 was an outlier for the post-9/11 Republicans, but Clinton hemorrhaged seats in 1994 (the Republican revolution), Bush lost a few in 1990, Reagan lost a bunch in 1982, Carter lost some in 1978, etc. I think 2010 could be a big loss for Democrats, since so much of the progress they’ll make in 2008 (and we could also include the gains of 2006 here) is a reaction against Bush. In 2010, Republicans will have had two years to distance themselves from Bush and bury his memory, and will almost certainly try to re-frame themselves as a party. On the other hand, everything bad that happens after 2008 will be blamed solely on the Democrats, since they’re the only ones in charge.

As a result, the excitement advantage of Democratic voters vs. Republicans will almost certainly shrink from 2008: Obama won’t be on the ticket to drive up turnout, and Republicans will whip up their voters by demonizing two years of Democratic policies. This decline in advantage will apply to fundraising, as well.

But the Democrats can blunt this advantage by passing campaign finance reform before 2010. In fact, the Democrats could build themselves a long-term advantage, depending on the type of reform they pass: for instance, the Democrats could leverage their advantage raising money from small donors by basing public funding on demonstrated support from a large number of small donors, and/or by lowering the maximum donation limit for each individual.