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Campaign Contributions Up, Despite Economic Downturn

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Capitol-hill-cropped.jpg

Capitol Hill (WDCpix)

As the nation’s economy mires in recession, most Americans are anticipating lower earnings by making do with less – but not those who call Capitol Hill home.

Fundraising by 10 House incumbents in the chamber’s most perennially competitive districts topped $2.56 million during the first three months of this year, according to a Washington Independent analysis of campaign-finance reports filed this week to the Federal Election Commission. That total represents an 18 percent increase from the 10 House districts’ incumbent fundraising during the similar post-election period in 2007.

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Lobbying.jpg

Image by: Matt Mahurin

The Senate money chase is also hitting dizzying heights despite the dismal economy. Total fundraising for the five closest races in the upper chamber, as rated by the independent Cook Political Report, hit $8.3 million during the first three months of 2009, an increase of 39 percent compared with five similarly competitive races during the same period in 2007.

The congressional fundraising juggernaut is pushing onward this year even as the U.S. savings rate climbs higher than it has in a decade and personal spending falls into negative territory. Paradoxically enough, campaign-finance analysts said that the economic crisis is likely pushing even more cash into Washington coffers as lawmakers embark on an unprecedented marathon of spending and legislating, from health-care reform to a possible second stimulus bill.

“The federal government is getting more intimately involved in the economy than we’ve seen in history, except perhaps for the Great Depression,” said Craig Holman, legislative representative for Public Citizen’s Congress Watch. “So we have special interests, the executive and management class of business in particular, investing much more heavily in lobbying Capitol Hill, and in fundraising on behalf of congressional candidates.”

The Washington Independent chose 10 House districts and five Senate races to analyze based on Cook’s ratings of competitive races for the first quarters of 2005, 2007, and 2009. Each of those three-month windows represents the first fundraising lap of a new cycle.

The 10 selected House districts run the gamut in terms of income and state-wide political preference. Only three of the seats are held by the same incumbent that was in office in 2005, and the partisan makeup of the 10 has changed dramatically during the past two election cycles: The seats are controlled by seven Democrats and three Republicans today, compared with two Democrats and eight Republicans four years ago.

That GOP-dominated slate actually experienced a better fundraising climate in early 2005 than the mostly Democratic incumbents enjoyed during the first months of this year. Sitting lawmakers in the 10 districts raised $2.66 million in the first quarter of 2005, nearly $100,000 more than was raised in the same areas in the comparable period this year.

If campaign fundraising tracked the economy’s overall performance — which grew steadily before showing the first signs of decline in early 2008 — the 10 House incumbents could be expected to have reaped more cash in 2007 than in the previous cycle before falling in 2009. But the 10 districts actually saw less incumbent fundraising in early 2007 than in the same period in 2005 or 2009.

As Sunlight Foundation Senior Fellow Bill Allison pointed out, the political season after the Democrats took back Congress in 2006 was hardly ripe for heavy giving.

“You had a Republican president who wasn’t eager to endorse the ideas of the new Congress,” Allison said. “Between the vetoes and the slimmer [Democratic] majority, not as much was getting done in Congress, which might have been less incentive for people to give … if there’s less on sale, there’s going to be less money coming in.”

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Meredith McGehee, policy director at the Campaign Legal Center, concurred that those most likely to donate to a congressional campaign are even more concerned with getting bang for their buck during a productive legislative term.

“Remember that givers are [part of] a small elite, particularly in congressional and Senate races,” McGehee said, “Less than 1 percent of all Americans give $200 or more. Because of that, what you have are people who want to stay active in the political system, because they feel like the system has a fairly big impact either on their business or on an issue they care passionately about.”

Another possible reason why fundraising hasn’t dropped along with Americans’ bank balances is the role played by “ordinary” donors in the 2008 presidential campaign. The Obama campaign often touted small contributions as the key ingredient in its success, raising the prospect of a radical re-orientation of the campaign-finance landscape.

But in reality, as the non-partisan Campaign Finance Institute found after the election, low-dollar donations made up about the same percentage of Obama’s war chest, 25 percent, as they did of George W. Bush’s – making everyday folks less important to candidates’ fundraising future.

“There was no indication that [small-dollar giving] had spillover into congressional races,” said Holman, of Public Citizen, “and I would expect it to completely fade away after the 2008 presidential election.”

What has faded slightly, thanks to the flailing economy, is individual donations to corporate political action committees (PACs). A Wall Street Journal analysis conducted earlier this month concluded that corporate PAC contributions fell by 6 percent during the first two months of this year relative to 2007, after increasing by at least one-third during the first quarters of the three previous election cycles.

Why would giving to corporate PACs slow down while giving to candidates rises? Sheila Krumholz, executive director of the Center for Responsive Politics, noted that donors who give to their senator or congressman have different motivations than workers who write a check to the company PAC.

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Senate-races.jpg

“Individuals giving to corporate PACs represent a slightly broader spectrum of a company’s workforce,” Krumholz said. “With PACs, it’s relatively smaller donations coming on a routine basis. For large individual donors [to candidates], these are CEOs, vice-presidents, partners – they’re giving in a concerted way.”

Looking at the rise in fundraising this year for the five most closely contested Senate seats reveals more unexpected trends. While the total amount raised for competitive Senate races has increased steadily, rising about 30 percent between the first quarter of 2005 and the same period in 2007, the rising pace of retirements has pushed more candidates into the hunt early.

Three of the five top races this year, in Ohio, Florida, and Missouri, are to claim open seats, and all are expected to draw at least three serious candidates. The remaining two, in Kentucky and Connecticut, have already drawn two challengers to the incumbent. (The Pennsylvania Senate field was firmed up too late in the quarter for significant fundraising to occur, and the New York and Illinois fields have yet to be settled.)

By contrast, the first quarter of 2007 saw only two of five competitive battles already joined: Sen. Susan Collins (R-Maine) knew she would face Rep. Tom Allen (D-Maine), and Democrat Al Franken had begun raising money to take on Sen. Norm Coleman (R-Minn.). Senate campaigns were even sleepier in the first months of 2005, with Minnesota’s open seat attracting interest but no other race drawing a challenger to the incumbent.

Perhaps because of that boom in Senate fundraising, the average amount raised per candidate has fallen for the most competitive races as winners and losers are crowned at a notably early point in the election cycle. Average fundraising per candidate in the five Senate races studied by The Washington Independent hit $768,000 in the first quarter of 2005 and $858,000 during the same period in 2007, before falling to $761,000 in the same period this year.

The first quarter of 2009, however, is only the beginning of the money tree-shaking that will occur as the two parties gear up for next year’s midterm election. And whether or not the weak economy starts to impede congressional fundraising, the primacy of economic rescue efforts will ensure that lawmakers have plenty more openings to dial for dollars.

“For the average citizen, the election is over and they’re not even going to think about it for the next four years,” Allison, of the Sunlight Foundation, said. But the donors “who are paying close attention,” he added, have a vested interest in what Congress does – or does not – pass into law this year.

Elana Schor is a freelance political reporter in Washington, DC. She has previously written for Talking Points Memo, The Guardian and The Hill.

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