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Blog: Economic Inequality and the McCutcheon Decision

Apr 30, 2014 | By Carolyn Burstein, NETWORK Communications Fellow

“Government should prevent an immoderate accumulation of riches.”  James Madison

The recent (April 2, 2014) McCutcheon v FEC decision provides another illustration of a direct link with the sprawling gap between the moneyed classes and the rest of Americans. Why? Because the Supreme Court decision eviscerated the aggregate limits of donations that can be given to candidates during an election cycle. Today, very wealthy donors who can afford to make many donations will have even greater influence with potential candidates. As former Supreme Court Justice John Paul Stevens told the NY Times on April 22: “The vote is less important than the man who provides money to the candidate. It is really wrong.” By conflating “donors” with “voters/constituents” the court majority makes it even more difficult for the voice of the common man to be heard.

After the decision, defenders of campaign limits worried that McCutcheon would increase the size and power of joint fundraising committees, which harness the fundraising power of different political committees. Events have already overtaken this concern, since on April 15 Republicans registered their 2014 Senators Classic Committee in which 19 Republican candidates were linked together under one fundraising umbrella. This committee will be able to accept donations as high as $98,800 at one time from a single donor, an amount outlawed until McCutcheon lifted aggregate limits.

Those supporting campaign limits also worry that future rulings will end all limits, including the limits currently intact. Already, thanks to Citizens United (2010) super PACs are subject to no limits on how much money they can accept from donors. Many strongly believe that McCutcheon opened the floodgates that will destroy all campaign finance reform dating from the early 1970s and the Watergate scandal.

The McCutcheon decision, in allowing the very wealthy to dominate elections in the U.S., sharpens the focus on the issue of inequality in our country. We know all kinds of statistics regarding this issue, such as the share of income going to the richest 10% of the population that jumped dramatically from around 30% in 1980 to nearly 50% by 2012, while the portion captured by the richest 1% of the population more than doubled, from 8% to 19%.

Even more disturbing are recent (April 8) releases of Harvard University’s Social Progress Index (SPI). The SPI evaluated 132 countries on a wide array of quality-of-life and well-being indicators. While ranking second in average per capita GDP (the average conceals information about the distribution and extremes that comprise the average), the U.S. ranks 70th in health, 69th in ecosystem sustainability, 39th in basic education, 34th in access to water and sanitation, and 31st in personal safety. In no category except per capita GDP, did we rank in the top 20.

We are all aware that U.S. bridges are collapsing, our highways and railroads are crumbling, our schools often fail our children because too much funding that should go into education and infrastructure is instead financing the implements of war and too little emphasis is placed on a fair tax code to raise reasonable revenue.

We’ll know that America is serious about reducing its deficit and national debt when a) military expenditures are drastically reduced, and b) the tax code is reformed to close the widening gap between haves and have-nots.

The U.S. could cut its military expenditures in half and still outspend nearly all major countries in defense. Martin Luther King was indeed right when he claimed in 1967 that militarism and economic injustice (and racism) are subtly intertwined.

Today, America has the most skewed distribution of wealth in the developed world. We desperately need to end unfair tax cuts (often in the form of subsidies) for the wealthy, close loopholes to force corporations to pay their fair share of taxes (corporate taxes have decreased significantly in the last two decades; numerous corporations are paying no tax at all) and experiment with new forms of taxes, such as imposing a value-added tax (VAT) and/or financial transaction taxes. Even if we were successful in passing these measures, we would still need to strengthen the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) as well as support and protect homeowners and the rights of unions if inequality were to be reduced. The logical next step would be to counter McCutcheon through a well-devised alternative case that would pass muster in this Supreme Court so that economic elites do not trample the influence of average citizens and turn our functioning democracy into a plutocracy.

The political views of the extremely wealthy seldom correspond with those of the average person because their life experiences diverge in so many ways. If the super-rich have a disproportionate influence on policy, asMcCutcheon would allow, then average Americans will discover their government making decisions that are antithetical to their best interests. 

The very wealthy few are degrading the common good through massive expenditures on super PACs (allowed by Citizens United); through candidates building relationships with wealthy individuals and ignoring the average voter; through lobbyists (paid by corporations) drafting legislation in committees; and through appointments of the super-rich to government offices and regulatory bodies.

In McCutcheon, money is considered a form of speech, yet money is never distributed equally among citizens. If equality between citizens is considered the bedrock foundational principle of democracy, how can America claim to have a democratic form of government?  The McCutcheon decision actually encourages the expression of monetary inequality in political life. The Supreme Court is telling us that those with more money have the legal right to more political power, and that is a lethal blow to our democracy. Former Supreme Court Justice John Paul Stevens even wrote: “The Court’s ruling threatens to undermine the integrity of elected institutions across the Nation.” (hppt:www.law.cornell.edu/supct/html/08-205.ZX.html).

Thus, as we can see, McCutcheon reverses any progress we may make toward greater equality or democracy and instead heightens the tendency toward inequality and plutocracy.

Pope Francis wrote in “The Joy of the Gospel” that “a new economic tyranny is thus born [referring to "trickle-down" economics], invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules.” Our society must discover the balance between a rigorous national defense, a free enterprise system that innovates, a true democracy that expresses the will of average citizens, a fair tax code that follows a geometric progression (steeper at the high end), and a social safety net that protects the most vulnerable.

“The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism – ownership of government by an individual, by a group, or by any other controlling private power.” President Franklin D. Roosevelt, “On the Concentration of Economic Power,” 1938