The Impact of Citizens United on Congressional Elections

Replete with detailed descriptions of policy accomplishments, challenges, and goals, State of the Union addresses are rarely the stuff of high drama. President Obama mostly adhered to this predictable formula in his January 27 State of the Union address, save for one moment. In speaking about the influence that special interests exercise in the political process, President Obama took the unusual (and, yes, dramatic) step of chastising the U.S. Supreme Court for its decision in Citizens United v. Federal Elections Commission.

Obama and Citizens United: Did he have the facts straight?
In a 5-4 decision which was announced on January 21, the Court ruled that the federal government may not ban independent political spending by corporations in candidate elections, although it remains illegal for corporations to contribute directly to federal campaigns from their corporate treasuries. Staring directly at the justices who were seated before him, Obama said, “With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests—including foreign corporations—to spend without limit in our elections.”

The moment hardly went unnoticed. In the days following the president’s address, debate raged over whether Obama’s comments were out of line or even entirely accurate. Most legal analysts concluded that Obama was correct in stating that the Court reversed a century of campaign finance law – the case directly addressed and overruled two precedents that restricted campaign spending by unions and corporations, Austin v. Michigan Chamber of Commerce and McConnell v. Federal Election Commission. (Restrictions on direct contributions by corporations were not affected. They continue to be outlawed as they have been since the 1907 Tillman Act.)

However analysts also agreed that Obama exaggerated the likelihood of foreign money flooding into candidate campaigns. The decision did not legalize unlimited political spending by foreign corporations, but it did leave open the question of how to treat U.S. subsidiaries of foreign-controlled corporations.

Money and congressional elections
Whether the decision will lead to a surge in corporate political spending is anyone’s guess. When federal campaign finance law changes, money is typically redirected. For example, when the 2002 Bipartisan Campaign Reform Act outlawed unlimited soft money contributions to the national party organizations, soft money contributors (corporations and unions, among others) created “527 committees” which could legally accept and spend money in unlimited amounts. Because the Citizens United decision grants corporations unlimited political spending rights, the need for 527 committees is all but eliminated. The decision could result in more spending, but it could also result in similar amounts of money being spent in different ways.

Members of Congress reacted to the presidential-judicial standoff along predictable lines; those who support campaign finance reform backed Obama and those who oppose reform sided with the Court’s majority. Democratic lawmakers are working with the White House to pass legislation that addresses the foreign subsidiaries loophole and minimizes the impact of the decision before the midterm elections. One question that looms large for members is whether and how the ruling will affect party fundraising efforts.

The decision and parties’ campaign committees
The congressional party campaign committees (the DSCC and the NRSC on the Senate side, and the DCCC and NRCC on the House side) focus primarily on raising money for candidate campaigns. Prohibited by law from accepting unlimited soft money contributions, they rely on regulated hard money contributions from members, individuals, and political action committees (PACs). The Citizens United decision did not alter federally regulated contribution limits. The decision, in other words, changed nothing in terms of how the party committees can raise and spend money. It may, however, indirectly change the role they play in candidate campaigns and congressional party politics.

The congressional party committees focus their efforts on competitive races. Their goal is to maintain the seats they have and, with luck, gain additional seats. Simply put, pouring money into safe races is not cost-effective. Incumbents representing safe districts and states are expected not only to raise money for their own races, but also for their colleagues in competitive races. This tradition of “sharing the wealth” provides the party committees with the money they need to help candidates in duress and safe incumbents with a systemized way to rack-up “chits” with party leaders. Both parties reward their top fundraisers with leadership posts, choice committee assignments, and other legislative and political perks. This system provides a way for the parties to help their most vulnerable candidates and reward their most generous incumbents.

What effect, if any, might the Citizens United decision have on this well-honed congressional party tradition? While parties focus their efforts on electing candidates who will help them maintain or gain majority control, special interests focus on electing candidates who support their issues. This is nothing new, but the fact that these special interests can now spend unlimited amounts of money to directly support or oppose candidates is.

The future: corporations and special interests
Most of the money party committees raise is spent on televised campaign advertising. No one can predict how much money special interests will spend on advertising in the upcoming midterm elections, but the party committees anticipate a spike in competition. As a result, safe incumbents are likely to face increased pressure to raise money for the party and for at-risk-candidates. But these incumbents also may fear for their own safety. What if they are opposed by a corporation willing—and now able—to spend unlimited amounts to secure their defeat? If safe incumbents begin to doubt their own safety, the party committees will likely suffer financially. And the less they are able to help their own candidates, the less power they wield.

Greater corporate participation in the elections process may also advance the trend toward more competitive primaries. The Citizens United decision may provide special interests with new incentive to seek out candidates who support their issues. Incumbents who face well-financed challengers in primaries are forced to raise and spend more money than those who only face competition in the general election. The party committees have traditionally stayed out of primary races so as to avoid charges of favoritism and to reserve money for general elections. But will the party committees be forced to respond if a growing number of their incumbents come under primary attack?

For all of these reasons, the Citizens United decision has the potential to create instability within congressional party organizations. Over the years, however, the parties have demonstrated a tremendous ability to adapt and persist. Chances are, they’ll continue to do just that.