Supreme Court: Little People Officially Irrelevant

Remember a few decades when Leona Helmsley scoffed: “Taxes are for little people”?

Well, the Supreme Court just expressed similar feelings about little people, at least as donors to political campaigns. The Supreme Court lifted the lid on the number of campaigns and PACs to which a donor may contribute. The limit per campaign, $5,200, still is in place, but the global limit at the federal level is gone. After today’s decision, in today’s unequal society, contributions of under $1,000 will be meaningless in campaigns for Congress.

Here’s the math:

Let’s say there are 300 House races that are not slam dunks one way or the other. The actual number is undoubtedly lower. Add to that 33 Senate races, and make the absurd assumption that all of those races are competitive. Multiply $5,200 by 333, and you’re at less than $2 Million.

We have just over 1,000 US billionaires. We have at least three or four times that many who are between half a billion and a billion in wealth. Most of those 5,000 or so folks are married, so we have perhaps 8,000 folks who can max out to every candidate on their side for a sum which to them is insignificant. Then we have the hundreds of thousands of folks who are worth between $5 million and $500 million who are politically engaged. Then we have leadership PACs and other PACs.

Any candidate who gets traction will be able to haul in at least 1,000 maximum-level contributions of $5,200 each. That’s over $5 million in contributions. And that will be the low-end. There will be House candidates who raise upwards of $20 million. House candidates today average well under $2 million in total contributions.

At the same time, the total capacity of small donors to contribute will stay about the same. For them, the change in the rules is meaningless. Their contribution limit isn’t set by law; it’s set by more immutable forces, like their incomes and their living expenses.

Go back 3 cycles to my 2008 race. I raised just under $2 million from start to finish. Of that amount, there were only 47 max out contributions. There were countless instances where a donor wanted to contribute, but was “federally maxed.” There were, however, PAC contributions and contributions from individuals at $1,000 or more, but not at the maximum.

Even back then, most of the total action was from $1,000 and up contributions.

But small donors still played a role, and a meaningful one. When Markos Moulitsas put me on Daily Kos’ “Orange to Blue” list, he raised $100,000 for me from small donors. That was over 5% of my total.

After today’s ruling, however, small donors won’t matter. With their capacity to contribute, small donors could fund perhaps 20% of a candidate’s campaign with their modest contributions. The Supreme Court has now reduced that percentage to under 10% and probably under 5% of a candidate’s total funding needs.

So, will candidates still spend the time and effort required to woo small donors? Remember, political campaigns are above all else a resource allocation challenge, and in the end it is time, not money, that is the most precious resource. (That point is drilled into your head at your first candidate training session) So, after today, no more phone calls for $200 checks. A candidate’s contact with small donors may be limited to email blasts from here forward. Even the evening fundraisers that haul in $5,000 or so in $200 checks likely will not be worth the time.

The message to small donors: Save your money. You may be able to make a difference by knocking on doors or making phone calls, so those activities still could be worthwhile. But your money just isn’t enough to make a difference anymore. You may as well spend it on your kid or buy yourself a nice dinner.