Campaign Finance Regulation

House Republicans have introduced a bill that imposes new restrictions on 527 groups, the independent organizations that attempt to influence politics. Under the new restrictions, individuals would face strict limits on their contributions to these groups. Republicans support these restrictions because rich donors like billionaire George Soros have given millions to Democratic-oriented 527s.

The proposed restrictions, along with all campaign finance regulation, are fundamentally misguided.

Campaign finance regulation does not reduce money’s influence in politics; interest groups always find ways around the regulation. A perfect illustration is 527s, which arose in response to pre-existing restrictions on contributions to candidates and political parties. 527s now spend large amounts on “issue ads,” communications that address political topics but do not explicitly endorse candidates. This has changed the way money influences politics but has not reduced that influence.

Money’s influence on political outcomes, moreover, is not necessarily bad. Some monied interests support bad policies, but others support good ones like reduced regulation and taxation. No mechanism consistent with the Constitution’s guarantee of free speech can limit one kind of influence without also limiting the other.

The best campaign finance regulation, therefore, is none at all.