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September 7, 2001
Money & Politics, Part 2: Senate Tax Writers Confound Conventional Wisdom On Campaign Fund Raising
The 21 members of the Senate Finance Committee write the tax laws that raise almost all of the money raised by the federal government, and they write the laws that govern about 50% of federal spending. This jurisdiction covers tax, trade, health care, social security, and welfare. So one would think that these 21 Senators would be in the catbird seat when it comes time to raise funds for their reelection campaigns. And maybe they are. But, apparently, some of them aren't making full use of the fund-raising advantage that goes along with a seat on Senate Finance.

Martin A. Sullivan, an economist with Tax Analysts, used to work on tax legislation as an economist for the congressional tax committees. Now he covers tax policy for Tax Notes magazine. In the September 3, 2001, edition of Tax Notes, Sullivan looks at the correlation between having a seat on the powerful Senate Finance Committee and raising funds for a reelection campaign. Interestingly, reports Sullivan, two of the top fundraisers on the committee during the 2000 elections lost their reelection bids. And one of them chaired the committee at the time.

Sullivan finds that the average amount ($3.5 million) raised by members of the Senate Finance Committee during their 2000 reelection cycles actually is less than the average amount ($5.3 million) raised by Senators seeking reelection who were not on the Committee. He suggests that one reason for this result might be that many members of the Committee represent states with small populations and, therefore, they don't need large campaign treasuries. However, members of the Senate Finance Committee generally do raise more money than Senators from the same states who are not on the Committee.

The conclusion? Assignment to the Senate Finance Committee may be an important factor in raising funds for reelection, but the need for the funds (e.g., a strong opponent) is a more important factor than the sources of campaign contributions that become available to Senators who secure a seat on the Committee.

Please contact Tax Analysts for the full text of Sullivan's article.

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Media Release 2001-4