Skip Navigation
Archive

Expand the 'Super PAC Tax'

One way to blunt the influence of super PACs is to allow candidates to buy more cheap TV time.

September 30, 2014

Have you heard about the super PAC tax on television commercials?

Here is how it works in Colorado -- a state with presidential levels of political advertising this year due to hotly contested Senate and gubernatorial races plus a statewide gambling referendum. According to a media consultant familiar with the Colorado market, a candidate can currently buy broadcast TV time in Denver at $400 a Gross Rating Point. But a super PAC has to pay $900 for the exact same ad slot.

That works out to a 225-percent super PAC tax. The surcharge on super PACs is even more onerous in the smaller Colorado Springs market: Candidates pay $85 per Gross Rating Point while other political organizations have to shell out $300 for an identical time buy.

Okay, I fibbed.

Technically, there is no such thing as a super PAC tax. But a little-known provision of a 1971 federal campaign reform law has almost the same effect. Candidates for any elective office (including county coroner) are entitled to something called the lowest unit rate -- the same volume discount that a TV station gives its best advertisers like McDonald's or car dealers. In contrast, a super PAC or any other political organization (including party committees) has to pay the going rate for broadcast time -- if any is available.

These FCC rules kick in 60 days before an election and 45 days before a primary. And for candidates for federal office, there is an extra bonus buried in this 1971 legislation: Television stations must sell them a reasonable amount of advertising slots in every time period except during news programs. Everyone else, on the other hand, can be totally shut out -- or consigned to seeing their commercials run at three in the morning.

(The rules governing political candidates and the lowest unit rate are devilishly complex. I am indebted to this primer prepared for broadcast stations by Washington communications attorney David D. Oxenford).

Some political groups like the Chamber of Commerce deliberately front-load their campaign commercials so that the bulk of their advertising is aired before the lowest unit rate takes effect. But many super PAC donors seem oblivious to the built-in advantages of candidate spending during the 60-day run-up to an election.

Why? It could be that the mega-rich in their whatever-it-takes political spending frenzy simply do not care about the super PAC tax -- although the wealthy are hyper-sensitive to taxes and government surcharges in all other realms of their lives. Or, in many cases, as I suspect, the political consultants making ads for super PACs have never told their donors about the FCC regulations governing the lowest unit rate.

The political press corps fosters this ignorance by almost never mentioning that candidates can buy TV time at much lower rates than super PACs in the last two months before an election. During the 2012 presidential campaign, I found only two media references to the lowest unit rate taking effect on September 7. This time around, John Dickerson in Slate was the rare political reporter to mention that campaign law does give a large financial break to candidate spending.

In the wake of Citizens United, one of the few short-term strategies for lessening the thumb-on-the-scale interventions by super PACs is to convince billionaire donors that they are often wasting their money on TV ads and sometimes are being ripped off by their campaign consultants. No one likes being a schnook -- especially if their net worth is reckoned in nine or ten digits.

All this has been a prelude to my proposing a piece of bipartisan campaign reform legislation that might, just might, pass Congress next year. The idea is simple -- apply the super PAC tax to the 2016 Iowa caucuses. And while Congress is at it, they should extend the lowest unit rate for candidate spending to 90 days (rather than the current 45 days) before a presidential primary or caucus.

Why would the anti-reform Republicans go along with that? Or Democrats comfortable with super PACs like Ready for Hillary and Priorities USA? Isn't this just another quixotic notion like amending the Constitution to overturn Citizens United?

The major reason why both parties now embrace super PACs is that they see a partisan advantage in their alliance with Croesus-level funders. The disadvantage that comes with this cynical bargain is that candidates in both parties worry that they are losing control of their own campaigns to these super PACs.

Focusing on the presidential primaries would eliminate any feeling by Republicans or Democrats that the FCC rules changes would come back to haunt them in November. Moreover, Republicans recall the mischief that super PACs played during the 2012 GOP primaries. Foster Friess (backing Rick Santorum) and Sheldon Adelson (cheerleading for Newt Gingrich) prolonged the nomination fight. Adelson's super PAC, in fact, pioneered the attacks on Mitt Romney's record at Bain Capital that the Democrats used so effectively in the general election.

With open nominations in both parties for the first time in the super PAC era, the airwaves in Des Moines and Cedar Rapids will feature wall-to-wall 30-second spots in the weeks before the opening-gun 2016 Iowa caucuses. Expanding the current rules governing the lowest unit rate will not, of course, drive super PACs out of Iowa or the 2016 campaigns. But it would lessen the influence of super PACs and maybe convince a few would-be donors that they would rather buy vacation islands or art with their excess money.

The 1971 campaign law that mandates that candidates have access to the cheapest TV time predates Watergate. In those days, the fear that united Republicans and Democrats was wealthy self-funders defeating incumbents. And lowering the cost of TV time was, in effect, an insurance policy against self-funders.

Today, both parties have a self-interest in maintaining control of the selection of their presidential nominees. Primaries and caucuses are chaotic enough without the intervention of super PACs. The last thing that Republicans and Democrats need is for billionaires to prop up candidates (see Gingrich, Newt) who cannot win in November.

As in 1971, there is the specter of uncontrollable outside money that should, in theory, bring both parties together in the quest for modest reforms. Whether the bipartisan leadership in the next Congress will grasp this opportunity to rein in super PACs remains a long shot. But nothing plausible would do more to protect both parties in 2016 than expanding the super PAC tax for the presidential primaries and caucuses.

The views expressed are the author's own and not necessarily those of the Brennan Center for Justice.

Walter Shapiro is an award-winning political columnist who has covered the last nine presidential campaigns. Along the way, he has worked for The Washington Post, Newsweek, Time, Esquire, USA Today and, most recently, Yahoo News. He is also a lecturer in political science at Yale UniversityHe can be reached by email at waltershapiro@ymail.com and followed on Twitter @MrWalterShapiro.

(Photo: Thinkstock)