The End of the Great Compromise

Constitutions are more than struggles over meaning or changing social values as interpreted by judges. Constitutions are part of larger political struggles and reflect that conflicts and compromises in those larger fights. The conflicts of the New Deal ended with a compromise—one that promised an open political process in lieu of constitutional protections for the rights of property. Eventually, policymakers turned to campaign-finance regulation to control opposition to what might be called the New Deal order. This interplay of a commitment to free speech and electoral vulnerability has shaped our nation for 80 years. Now we seem likely to take another path that greatly limits the Progressive commitment to the freedom of speech. This essay examines the Great Compromise and the reasons for its impending demise.

The politics of campaign-finance regulation begin where contemporary American politics begins, the New Deal. The New Deal sought to expand government control over the economy. That effort led to political conflict with people President Roosevelt deemed “economic royalists.” The New Deal also ran up against a Supreme Court willing to enforce constitutional limits on federal power. The President responded by threatening the Court. He would lose the court-packing battle but win the war over the Constitution.

Political conflicts, like wars, often end in incomplete settlements reflecting the domination of the victor without crushing the defeated. The famous Footnote Four of United States v. Carolene Products (1938) offered a deal to those who had lost the fight over limiting government. On the one hand, the Court would no longer offer constitutional protection to “ordinary commercial transactions”; government would have a free hand in regulating the economy. On the other, those opposing such regulations could try to change the will of a majority and thereby, the law. The courts would keep the political process open to such persuasion. What might have been the constitutional rights of property became a protected right of appeal to the majority.

The Carolene Products settlement was incongruous. The New Deal was the political face of a managerial revolution.[1] Its officials assumed that expert regulation of the use of private property would best serve the common good. Why should the use of private property in politics be free of expert oversight? Consider also the politics of the situation. Would the “economic royalists” use their wealth to fight back in the electoral arena? Why not preclude that threat by regulating money in politics?

Other factors no doubt counseled caution. Clamping down hard on political spending by his enemies would have exacerbated the alarm prompted by the Court-packing plan, and the suspicion, even, that FDR wished to become a dictator. Then, too, the Court itself might have seen such repression as unwise. After all, if the New Deal’s opponents had recourse to neither the courts nor the legislature, how might they resist? Leaving some space for politics would be sensible. The justices who voted in the majority on the Court might also have thought the First Amendment protected their political allies, trade unions, and others.[2]

The political situation of 1938 also suggested a measure of constraint by the Carolene Products Court. There were few threats to the power of the New Dealers. The President had won re-election in a landslide in 1936. Democrats and liberals controlled 80 percent of both chambers of the 75th Congress (1937-1939). The New Dealers could afford to be generous to their defeated foes, especially since what was offered—political engagement—could hardly be expected to challenge the incipient Progressive state.

The New Deal and the Great Compromise remained undisturbed until 1968. The second coming of FDR, Lyndon Johnson, was driven from office by a challenger from the Left, Eugene McCarthy. The struggles over civil rights led to a serious challenger from the Right, George Wallace. And Richard Nixon won the presidency by raising and spending large sums on television ads. The Republican Nixon was hardly a foe of the New Deal in practice, but his success with the new media gave Progressivism intimations of dangers to come.

I thus disagree with Professor Muller, who sees Watergate as an important moment in campaign-finance regulation. Congress responded to Nixon’s 1968 victory with campaign-finance regulations, initially in 1969 with limits on broadcast spending imposed state-by-state and later with strict constraints on overall spending and contributions. Muller is correct that reformers got most of their wish list because of Watergate. Taxpayer funding of presidential elections, though seemingly neutral between the parties, in fact restricted a growing GOP advantage by requiring major party candidates to spend the same amount. Mandatory disclosure of donors made possible surveillance of the most active opponents of the New Deal order. Thus did Congress abandon the Great Compromise in favor, said Democrats, of assuring equality or preventing corruption (or its appearance).

Elections were unsettled in that period. In most elections in the decade before the landmark case of Buckley v. Valeo (1976), more than 90 percent of all incumbents sought re-election, and more than 95 percent of those who ran, won. In 1974, the year campaign-finance regulation passed, the trend shifted: 40 House incumbents lost and turnover in general sharply increased.[3] From 1968 to 1974, the political status quo that had reigned since the New Deal had been disrupted. We also now know, from the index of public opinion compiled by James Stimson, that public support for expanding government declined sharply from 1971 to 1980.[4] The Buckley Court might have agreed with majorities in Congress that some restrictions on political opposition were in order. And they did agree, in part.

The threat to the New Deal order was not necessarily clear in 1976. Watergate had brought the resignation of a Republican President. The Democrats gained 49 seats in the 1974 House elections and thereafter held two-thirds of the entire chamber. In the Senate, the Democrats gained four, seats for a total of 61. They gained a similar number of governorships, holding 32 of the 50. A contemporary observer saw the GOP “slipping deeper into a minority status that was unlikely to end in the foreseeable future.”[5]

Indeed, the Republicans who remained were less likely than previous GOP members to challenge the New Deal. As James Stimson has written, “The Republican group in the 94th House was also expected to shift slightly toward liberalism even as it shrank by 43 members. Nearly every House Republican beaten Nov. 5 was counted among the conservatives; the liberal and moderate Republicans generally had little trouble winning re-election.”[6]

The justices could not know the public mood would continue to favor less government for another six years; they might have reasonably assumed that the 1974 election returns and Watergate would revive support for more government. (Again, see the Stimson index.) Like the Carolene Products Court, the Buckley Court could find room for compromise. Allowing the funding of political opposition would probably not change things much.

In Buckley, the opponents of campaign-finance regulation received some concessions. The Court recognized that spending money implicated the First Amendment; such spending had more constitutional protections than investing in a business or buying products. The Court also struck down overall spending limits, and it denied that the goal of equalizing influence could justify campaign-finance regulations. The New Dealers got their half a loaf, too. Contributions limits were upheld along with public funding of presidential elections and mandatory disclosure. Contribution limits would hamper support for unwelcome candidates, whose donors, in any case would be disclosed and thereafter intimidated and abused. The presidential public funding system would enforce equality of spending on the two major party candidates, thereby taking away a growing Republican advantage.

Buckley satisfied few. Critics on the Right argued that limiting campaign contributions implicated speech. Progressives had ideological complaints: The Court had allowed filthy lucre to invade the purity of political idealism. Such complaints rationalized a deeper political problem. To really threaten the Progressive regime, its opponents would have to spend more than incumbent members of Congress. Their spending would thus be unequal, and (had Buckley come out differently) subject to spending limits. The Left’s 1974 congressional landslide would have faced fewer and less effective challenges. For the Progressives, the Buckley Court had missed a rare chance to hobble the opponents of Progressivism. Overturning Buckley would become a major goal of the Left in subsequent years.

What of political threats to Progressivism since Buckley? We have not seen the end of the era of big government. The four presidential terms beginning with Clinton’s re-election included three major healthcare laws (a preeminent Progressive concern) and for perhaps the last decade, a declining interest in public debt and budgetary constraint. Republicans did for a time propose Social Security reform, but that concern now seems far from the agenda of either party. Indeed, both major party candidates in 2016 seem committed to increasing entitlement spending. Elections also suggest Progressive strength. Democrats also won the most votes in five out of six presidential elections beginning in 1992. Among those winners was the unabashed man of the Left, Barack Obama.

But these achievements are not the whole story.

The post-Buckley era has raised doubts about the ultimate victory of Progressivism. The 20 years after Buckley saw the election of Ronald Reagan and a GOP Senate in 1980 as well as the election of a Republican House in 1994 and thereafter moderation in the Clinton administration. The Reagan administration reduced the portion of GDP going to government, and the Clinton administration and Republican Congress actually restrained spending, especially at the Pentagon. The renascence of the Left in 2008 fostered significant electoral resistance. The House elections of 2010 and 2014 returned the largest Republican caucus since before the New Deal.[7] In the states and localities, the Obama era has seen large increases in GOP governors and legislators.[8]

It was, in some measure, campaign-finance deregulation that produced these setbacks for the Left. Party soft money grew during the Reagan and Clinton eras, which was followed by relatively unrestricted spending by groups organized under section 527 of the Internal Revenue Code and then of course, by Super PACs. The enormous hostility to the Supreme Court’s decision in Citizens United (2010) reflects the fears fostered by this spending. At the same time, the presidential public financing system has died, and with it, equal partisan spending on the general presidential election. It matters not that Democrats and Leftist groups have maintained a rough equality in fundraising or that Barack Obama proved to be the greatest fundraiser ever. In fact, Obama’s departure from center stage may increase Progressive fears. How can the Left continue to match the Right without the greatest fundraiser ever?

This rising sense of danger has brought with it ideological changes that have undermined the Great Compromise. The Carolene Products Court endorsed activist government and implicitly unequal political struggle. The Buckley Court defended money in politics and denied the egalitarian rationale for regulating it. John Rawls, the philosopher of the New Deal, required improving the lot of the poor rather than equalizing wealth or income; he refused to trade off political rights for social justice.[9]

In contrast, contemporary Progressives see society divided between the oppressor and the oppressed.[10] The former harms the latter in myriad ways so the task of government is to “comfort the afflicted and afflict the comfortable.” The oppressor (that is, the oppressor class) has no claim to protection from acts of government that are aimed at helping the oppressed. The wealthy and the corporations, for example, have no rights to free speech. Indeed, egalitarians believe that whereas the First Amendment had once protected strikers and the poor, everything changed in the 1970s “when the corporations began to win.”[11] The oppressor then funded political activities that, it is claimed, harmed the poor by cutting back redistribution and, more generally, the welfare-administrative state.

For this reason, the Party of Progress has become the party of maximal campaign-finance regulation. Only by restricting the political activities of the oppressor can government help the oppressed. But egalitarianism suggests more than pragmatic politics. The political speech of the oppressor could not possibly have any legitimacy in a good society. To the contrary, such speech is a barrier to achieving a good society.[12]

The world has changed in two important ways since Carolene Products and Buckley: Progressives are far more electorally vulnerable than they were, and they are far less supportive of according free speech rights to their opponents. Until Antonin Scalia’s death, Progressives lacked the power to act on these two developments. The year 2017 may bring a new Supreme Court majority. That majority will certainly overturn Citizens United. But what of Buckley? The restraints on Congress in Buckley may also be pushed aside in pursuit of the full management of society, including our politics and elections.

If Buckley falls, the Great Compromise will have been completely renounced. We have lived so long with that settlement that we cannot guess what comes next. But the politics to come seem unlikely to be as liberal as the politics we have known.

[1] James Burnham, The Managerial Revolution: What Is Happening in the World (John Day Co., 1941).

[2] Owen Fiss, “Free Speech and Social Structure,” Iowa Law Review 71(1986): 1701.

[3] See “1974 Elections: A Major Sweep for the Democrats,” in CQ Almanac 1974, 30th edition (Washington, DC: Congressional Quarterly, 1975), pp. 839-40. http://library.cqpress.com/cqalmanac/cqal74-1222893.

[4] See the estimation of the policy mood by James Stimson at http://stimson.web.unc.edu/data/. More generally, see Stimson’s Tides of Consent: How Public Opinion Shapes American Politics, Revised Second Edition (Cambridge University Press, 2015).

[5] “1974 Elections: A Major Sweep for the Democrats.”

[6] See “The House: More Than Two-Thirds Democratic,” in CQ Almanac 1974, 30th edition (Washington, DC: Congressional Quarterly, 1975), pp. 845-47. http://library.cqpress.com/cqalmanac/cqal74-1222965.

[7]  U.S. House of Representatives, “Party Divisions of the House of Representatives: 1789 to the Present,” at http://history.house.gov/Institution/Party-Divisions/Party-Divisions/.

[8] “In January [2016], Republicans will occupy 32 of the nation’s governorships, 10 more than they did in 2009. Democratic losses in state legislatures under Mr. Obama rank among the worst in the last 115 years, with 816 Democratic lawmakers losing their jobs and Republican control of legislatures doubling since the president took office — more seats lost than under any president since Dwight D. Eisenhower.” Sheryl Gay Stolberg, Michael D. Shear, and Alan Blinder, “In Obama Era, G.O.P. Bosters Grip in the States,” New York Times, November 12, 2015.

[9] John Rawls, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971), p. 244: “By the priority of liberty I mean the precedence of the principle of equal liberty over the second principle of justice.”

[10] Arnold Kling, The Three Languages of Politics (Amazon, 2013).

[11] Fiss, “Social Structure.”

[12] The rising intolerance of the Left extends well beyond Citizens United. The IRS harassed groups opposing Obama’s re-election. Wisconsin prosecutors pursued critics of Progressivism in the infamous John Doe scandal. Leading Progressive Senators have called for prosecution of those who question the Left’s conclusions about climate-change policy.