Obama and The Small Donor Effect
An edited version of this posting appeared as a guest post on the Anderson Cooper 360 blog June 20.
Barack Obama's decision to opt out of public funding for the general election is not a surprise. It was so well telegraphed, he should take out a patent.
The presidential public funding system worked well for three decades after it was enacted in the early 1970s. It leveled the playing field, boosted competition and reduced corruption. Think of it this way: in the first five elections under presidential public funding, a challenger beat an incumbent president three times. There's no congressional district in America with that much competition!
But the presidential system needs repair, for reasons among those prompting Obama to turn away the federal funds. Principally, candidates simply don't get enough money to mount a fully strong race in a modern election. The amount, when it was set, was about two thirds of the amount spent by the McGovern campaign of 1972—in other words, two thirds of the least successful presidential campaign in modern history!The real question is what will Barack Obama—or John McCain—do to reform the system when one of them takes office?
Both candidates have strong reform records. Obama led on ethics reform in the Congress, and has been a vocal supporter of public funding. McCain co-sponsored the Bipartisan Campaign Reform Act (BCRA), which stemmed the flood of big unregulated "soft money" contributions. In the past, McCain has supported public funding for congressional campaigns, though apparently he has backed off that position.
The next president should insist that reform be an early priority for Congress. Sen. Dick Durbin (D-IL) and Arlen Specter (R-PA) have introduced a strong public funding bill for Senate races. It would provide a substantial amount of public funding, so qualifying candidates do not have to chase the big money that dominates politics.
This year's exciting campaign offers another twist, which could give ordinary citizens an added loud voice. One reason Obama spurned public funds is that he has reaped an unprecedented flood of small donor contributions, given largely over the Internet. But in Congress, candidates are still raising funds the old fashioned way: just 10 percent of contributions are from "small donors." The small donor revolution is just a rumor on Capitol Hill, where few candidates have Obama's charisma. Why not improve the public funding plan by letting candidates raise more money from small contributions? We could even provide public matching funds, as is the case in New York City (where small gifts get a multiple match, so a $50 contribution is worth $350—real money, even in the Big Apple). That will push candidates to spend time on grassroots organizing—another boost for participation.
There is also a strong bill to fix the presidential public funding system. Introduced by Sen. Russ Feingold of Wisconsin, it would boost the amount of funds and clean up the rules that can make the presidential system a tangle. Also, it increases the tax checkoff to ten dollars, so there is enough money available. (Perhaps we should think of the right amount of checkoff as being pegged to the price of a latte ...) This bill should be relatively noncontroversial and could move quickly.
Obama is running on "change," and McCain on "reform." There's a rare moment when both parties are competing to tell voters what they will do to boost democracy and fix the system. It's up to us voters to make the most of it. The real question is not what the candidates do in 2008. What we should ask is: what are you going to do in 2009?
