While the primary elections are winding down, the money primary will continue until the party conventions in August and the official start of the general election. The decisions by the remaining presidential candidates to defect from the presidential public funding system for the primaries make it clear that the system has become a fixer-upper.
The Presidential Election Campaign Fund, the bank account that holds public funding for the primary, Republican and Democratic national conventions and the general election, has grown to approximately $250 million. Like about 10 percent of other federal income tax filers this April, we both checked off the box to earmark $3 for the fund. Yet this election cycle, sadly, marks a high—or low—point for the number of viable presidential candidates who turned away public financing during the primary.
The amount actually distributed by the presidential fund is likely to reach an all-time low in the 2008 election season. At the end of 2007, a total of about $20 million was given to candidates who opted into the matching funds program. That’s less than 2004's $27 million, and is even below the $25 million disbursed in 1976. It’s become obvious that the system needs a makeover.
Why are fewer front-running candidates participating? Take this week’s Indiana primary, where the two Democratic candidates spent nearly $10 million combined on paid advertising alone. In Pennsylvania, the pair spent an estimated $20 million total for April’s primary, a record for the state. To receive public funding this cycle, a candidate had to agree to limit spending to $3.2 million in Indiana and $6.5 million in Pennsylvania under the FEC’s formula.
To receive matching public funds in the primary—up to $250 for every donation up to the current federal limit for individuals of $2,300—candidates agree to abide by state-by-state spending limits set by an arcane formula: $200,000 plus cost of living adjustment since 1974, or the voting age population multiplied by 16 cents, whichever is greater. This formula is out-of-whack: each state has a unique political calculus, which varies among candidates and election cycles.
According to the Federal Election Commission’s formula, does it make sense for the limits for New York, Florida and Texas to be roughly the same (respectively, $10 million, $9.5 million and $11.6 million)? On the other end of the spectrum, the limit for New Hampshire (and Maine and Vermont) is $841,000. Given the Granite State’s “first-in-the-nation status” for the primaries, a cap of less than $1 million is not a 2008 reality.
There was little incentive for the three presidential front-runners to use the $42 million each available this year for the primary, given these spending limits, when they can raise similar sums in a single month. Unfortunately, the $85 million lump sum available per candidate for the general election may be headed for the similar fate if the presidential nominees of one or both parties turn it down. That would be the first time a party candidate rejected public financing in the general election since the program began in 1976.
The 1974 amendments to the federal election law (FECA) establishing the current system were meant to safeguard the presidential campaigns from the influence of wealthy donors who could call the shots as campaign insiders on White House policy. The program worked well for two and a half decades, turning many long-shot candidates into household names: most notably and successfully, an Arkansas Governor named Bill Clinton.
But except for cost-of-living adjustments and a tripling of the check-off from $1 to $3, not much has changed with presidential public funding since its inception 30 years ago. For starters, it has failed to take into account the changing face of fundraising. Rare is the traditional rubber chicken dinner where candidates come face-to-face with supporters and sing for their supper. Following her victory in the Pennsylvania primary Sen. Clinton’s campaign claimed it raised $10 in a 24-hour period. And, on the anniversary of the Boston Tea Party, GOP candidate Ron Paul raised over $6 million in a single day on the web. In a fairly recent phenomenon, independent expenditures and 527 advertising will likely total hundreds of millions of dollars by year’s end.
The current $42 million cap for the primaries is ludicrous when candidates can collect as much in a month, which Sen. Obama’s campaign reported last month and in February, when the total take was actually $55 million. The alternative is a primary lump sum grant that will free candidates from static state-by-state spending limits so they can tailor the money to their electoral needs. And with the recent arrival of front-loaded primaries and caucus, the public money should be distributed before December, since the campaigns begin in earnest months earlier.
In the general election, candidates who use the lump sum should be empowered to remain competitive even if facing a privately funded opponent who can spend without limits. State public funding systems have solved this problem by disbursing additional “fair fight funds” to match the money spent by nonparticipating candidates, up to a pre-set cap. Moreover, the rapidly growing amounts of money spent on independent expenditures require that we equip publicly funded candidates with the ability to respond. Candidates should be given more money to enable them to answer attacks and control their own message.
Late last year, Sens. Feingold (D-Wis.) and Collins (R-Maine) and Reps. Price (D-N.C. and Shays (R-Conn.) anticipated these issues and introduced the Presidential Public Funding Act. The bills do most of what’s suggested here and more, including raising the check-off to $10 for individuals and $20 for couples to account for the increased grants.
In pointing out the failings of the current system, we’re not suggesting that people should stop checking off their tax returns; We’ll continue to do so. The system of public financing for presidential candidates plays a valuable role in democratizing the election and avoiding a spectacle in which contenders for the highest office in the land are seen groveling for dollars from wealthy special interests. We should do what it takes to save the system, which worked well for decades. The next Congress should consider and pass FECA, version 2.0.