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Report: Consumer Protection
The Wealth Primary
Despite the recent corruption scandals in Washington DC, the most significant problem with money in politics is that large contributions, which only a fraction of the American public can afford to make, unduly influence who runs for office and who wins elections in the United States. Money is a critical — and perhaps decisive — factor in determining election outcomes. Candidates who wish to present their views to the voters must first compete in the “wealth primary.” Without personal wealth or the ability to raise large sums of money from well-heeled contributors, many aspiring officeholders are locked out of the process before the first vote is cast. Those voters who wish to express views that are not supported by wealthy donors are left without an outlet.
Our focus on primaries is particularly instructive. Partisan redistricting has ensured that fewer general elections for the U.S. House of Representatives are meaningfully competitive. This means that the primary election of the dominant party is often the most important race in many districts and makes primaries the best forum in which to examine the influence of money on winning and losing— free from the confounding factor of district makeup.
Our analysis of Federal Election Commission (FEC) campaign finance data for the 2006 primary elections shows that money played a key role in determining election outcomes and that most campaign contributions came from a small number of large donors.
- Money was a key factor in determining primary election outcomes. According to FEC data, major party congressional candidates who raised the most money won 92% of their primary races in 2006. Candidates who spent the most won 91% of the time. Winning candidates out-raised their opponents by a margin of 3.5-to-1, with the winners raising an average of $1.06 million and losers raising $304,000. This pattern held true for open seat races as well. The biggest fundraiser won 82% of the contests without an incumbent running for re-election in the district.
- The vast majority of campaign contributions came from a small number of large donors. FEC data indicate that while only 0.27% of voting age Americans made a contribution to a candidate of $200 or more, these large donations accounted for 82% of individual contributions received by primary candidates. More than a quarter (29%) of the contributions came at or above the $2,000 level, while only 0.03% of voting age Americans made a $2,000 contribution.
- Large war chests hindered electoral competition. Fully three quarters (76%) of 2006 congressional primary races featured only one candidate seeking his or her party’s nomination, providing voters with no real choice on primary election day. One reason for this is that large financial advantages of either incumbents or “firstmovers” (often party favorites) discourage meaningful competition. Incumbent candidates began the 2006 election cycle with about $188 million in cash on hand, for an average of more than $432,000 per incumbent. The average incumbent Senator started his or her reelection campaign with $1.43 million already on hand.
In order to strengthen the voices of ordinary non-wealthy Americans in the political process and break the stranglehold of a small minority of well-heeled donors over who runs for office and who wins elections, we recommend the following policy proposals:
- Offer candidates who demonstrate sufficient community support a full public funding option in exchange for accepting a voluntary spending limit and forgoing private funds;
- Provide free media for qualified candidates;
- Provide incentives for small political contributions such as tax credits, refunds, and vouchers;
- Lower campaign contribution limits to a level that average Americans can afford to give; and
- Limit campaign spending to make elections contests of ideas, not battles for dollars.
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