Selling Out the Center: Campaign Finance and Political Polarization

Since the beginning of his term, President Trump has issued two executive orders extending the TikTok sale deadline and publicly proposed creating a sovereign wealth fund with the intention of buying the app. After years of attacking TikTok in his attempts to reduce Chinese economic power and influence in the United States, including championing a ban in the final year of his presidency, this move might at first seem to be a surprising reversal. 

But Trump's policy switch isn't just about TikTok; his positions changed shortly after a meeting with key conservative donor Jeff Yass, who holds a large stake in the social media platform. And, of course, President Trump certainly isn’t alone in switching up on his prior, relatively popular positions to cater to wealthy interest groups—it’s part of a larger trend of political actors responding to the interests of issue-specific donors and PACs, rather than adhering to their original platforms. This issue is deeply linked to the general atmosphere of political polarization that has arisen in our country. While American voters are generally less polarized than they believe themselves to be, politicians and candidates tend to be highly polarized and have been growing steadily more polarized over the last 20 years. The key culprit? Our current campaign finance system, which encourages extremism from politicians and in political dialogue.

In the world of campaign finance, there are two types of money: hard money, contributions made directly to candidates, and soft money, which is money devoted to parties, Political Action Committees (PACs), or messaging about a specific issue or platform. Campaign contributions were first constrained in 1971 through the Federal Election Campaign Act (FECA) and further in the Bipartisan Campaign Reform Act (BCRA), also known as McCain-Feingold, in 2002. The BCRA particularly sought to crack down on the use of soft money by weakening the ability of parties to raise and distribute money through donation caps and contribution limits.

But the law of unintended consequences struck hard. For much of American history, party insiders have served as a moderating, dealmaking force in primaries and beyond. Therefore, when the party apparatus they control is weakened, extremist and factionalist candidates are more likely to win. As argued in UMass-Amherst political scientist Raymond La Raja and Tufts’ Brian Schaffner’s 2015 book Campaign Finance and Political Polarization: When Purists Prevail, parties are “the sole political organizations whose primary goal is to win elections…forcing [them] to exercise a moderating effect on those who win office,” a conclusion supported by recent analysis on the 2024 election.

It’s worth noting that, despite the efforts of campaign finance reform activists, inflation-adjusted election spending has continued to grow since the BCRA. And the vast majority of these ever-increasing expenditures come from PACs and candidate campaigns rather than parties. For the 2024 election cycle, from January 1, 2023, through June 30, 2024, almost 90% of receipts and disbursements came from candidates and PACs rather than party committees. 

So, while the overall amount of money in politics hasn’t been lowered, efforts to reduce soft money have constrained fundraising and spending by formal party organizations. Essentially, money that parties could have raised and spent is now being raised by issue activists and PACs. Because candidates cannot receive sufficient support from the parties, they must rely on what La Raja and Schaffner call “party-like” organizations instead. Unlike parties, which are focused on winning, these organizations promote specific and extreme positions and expect candidates they fund to both espouse and legislate them, even if they aren't necessary to appeal to voters. 

This tendency is compounded by the fact that, as La Raja and Schaffner argue, campaign finance laws “have institutionalized a ‘candidate-centered’ system of financing, which encourages candidates to reach out to non-party sources for funds.” Donations focus on specific candidates and their policies rather than the party platform generally, which undermines the party by creating a cycle of decreased party control and increased control by interest groups. Everyone from environmental groups to anti-abortion activists works with candidates individually, putting pressure on politicians to adopt more radical views to keep the money flowing. 

Since the passage of the BCRA, there has been a slate of federal court cases aimed at bringing down individual provisions. Citizens United v. FEC, the most famous of these, delivered a resounding victory for free speech advocates by allowing unlimited independent expenditures by organizations, bringing about the age of Super PACs. 

However, while the Citizens United ruling undoubtedly opened an important conduit for speech, the policy implications for parties have been deeply problematic. In his 2021 book Crackup, about the fracturing of the Republican Party, UCSD Political Science Professor Samuel Popkin concluded that the resulting explosion of Super PACs undermined party systems by allowing single-issue activist groups and wealthy individuals to push for extremist candidates supporting their beliefs. His solution? Strengthen national party leaders and platforms by giving parties a better funding and distribution apparatus. 

To help reduce the polarization gripping our country, we must abandon the idea that money in politics is bad and focus on creating a party-centric financing system. Instead of reforming campaign finance with the premise that individuals or groups spending money on elections is inherently wrong, we need to ensure instead that money isn’t flowing into the system in ways that damage our unalienable and individual rights, our ability to get along as Americans, or our democratic institutions. 

Congress and state legislatures should abolish limits on direct contributions from individuals and corporations to parties and remove restrictions on monetary support from parties to candidates. Subject to considerations of Randall v. Sorrell and other precedents striking down overly strict caps on fundraising, they should also attempt to impose stronger limits on contributions to individual candidates. Additionally, party committees and insiders should take a more prominent role in the primary and general election selection processes to promote moderate candidates who will win, promote party unity, help other candidates, and form bipartisan coalitions. 

No doubt, there is some value in having politicians with divergent, unique, new, and even radical positions in the marketplace of ideas. But in this age of social media, a wide spectrum of think tanks, and plenty of safe districts which will no doubt elect ideologues, there won’t be any shortage of radical views even if we change campaign finance rules. It’s moderate voters who are increasingly unrepresented, which wreaks havoc on our ability to engage in positive, constructive discourse or work across party lines. Direct democratic forces no doubt have their role in the American system, but, as expressed so powerfully in James Madison’s “Federalist No. 14,” our system is predicated on a fundamentally different, moderated expression of popular will—one designed to prevent demagoguery and extreme personal ambition through checks, balances, and trustee representation.

Decisive, structural change is necessary to address the issue of political polarization in our country. By institutionalizing a system of party-centric financing, our legislators can help elevate the reasonable middle and prevent candidates from having to sell themselves to radical interest groups.