From the deep-thinking depths of Washington's think tanks to the pedestals of its media pundits, campaign public financing has been duly and dutifully declared dead.
After all, it was the liberals' own hero, Barack Obama, who became the first major party presidential candidate to forego public financing in 2008 and plans to raise more than $1 billion in private funds to win reelection. So conservatives took aim: "GOP Seeks to End Public Campaign Financing," Foxnews.com reported when the House voted to defund presidential public funding this year. Meanwhile, the U.S. Supreme Court long ago called money a form of free speech, has allowed corporations and unions to spend freely on campaigns, and will this year rule on statewide public campaign financing.
So no wonder the National Journal wondered, earlier this year: "Who killed public financing?"
But the moaners and mourners have it all wrong. Public financing of campaigns is alive and well in America. Public financing is more than thriving -- it is driving our politics more now than ever. The real problem is that all this is happening through a form of public financing that is the most costly and least cost-effective way imaginable.
Politics in America is being financed by our tax dollars. Not by tax dollars that are dispensed to finance political campaigns, but by dollars that wealthy special interests should have been paying into the U.S. Treasury -- but which they legally avoid paying in taxes.
We now have an example of how the system really works: the impressively creative and incredibly successful federal income tax avoidance efforts of the executive masterminds of General Electric. And we know about it thanks to the Pulitzer Prize-deserving enterprise reporting of The New York Times' David Kocieniewski. He reported last month that in 2010, G.E. had global profits totaling $14.2 billion -- $5.1 billion of them earned by its U.S. operations - and yet G.E. paid zero federal taxes in 2010. The huge multinational corporation apparently violated no laws, but just took advantage of the loopholes it helped the Congress manufacture. Mainly, a loophole that allowed G.E. to shift profits overseas and pay no U.S. taxes on them.
In its detailed report of how G.E. legally avoided paying any taxes in 2010, The Times did not make the connection between what G.E. did and public campaign financing. But it is essential that we make that connection now. Because this is how the system works in our democracy. And we must understand it if we are ever to be able to improve it.
For years, philosophic and political protectors of special interests that range from big business to big labor and single interest activists have made the case that campaign financing using public tax funds should be scrapped.
What they never mention is that after getting rid of formal public financing, we are left with a system by which politicians finance their campaigns from funds that are invested (see also: contributed) in their elections by special interests. But special interests make these investments for the same reason they make all investments -- to reap a big profit. For the money they invest in the form of campaign funding, special interests get access to the senators, representatives, and executive branch officials. The special interests work with these public officials to devise laws and regulations that will give them huge profits in the form of tax write-offs, tax shelters, and assorted, credits, subsidies and look-the-other-ways.
Politicians famously but quietly dial for dollars, demanding campaign funds from special interests regulated by the committees on which the members serve. Special interests invest millions in politicians and reap billions back in profits, in the form of taxes avoided. All of that is money that would have gone into the U.S. Treasury. Hence, that is why we still have public financing of our politics -- in the most costly and least cost-effective way imaginable.
The solutions ranged from scrapping many if not all of the corporate deductions and dodges to at least requiring that corporations pay a minimum but equitably sizable tax. No matter what.
It's time we recognize our most shameful, wasteful form of public campaign financing for what it is. And fix it.
Martin Schram writes political analysis for Scripps Howard News Service. E-mail him at firstname.lastname@example.org.