Posted October 31, 2007 by Meredith McGehee

The Evidence Mounts for Presidential Public Financing

The following ran as a guest opinion piece in The Hill on October 30, 2007 under the title:"Make publicly financed campaigns viable." 

The blistering pace of presidential fundraising continued unabated in the third quarter.  Just four years ago it would have been hard to fathom that having raised more than $30 million a full year before the election would leave a candidate in a distant second tier of fundraisers, tens of millions of dollars behind the frontrunners.

Former Senator John Edwards’ (D) recent announcement that he will seek to utilize the presidential public financing was interpreted as a death knell by pundits and journalists.  His decision is yet another indication that only those candidates losing the fundraising fight will participate.  The leading contenders – such as Senators Hillary Clinton and Barack Obama on the Democratic side, former Governor Mitt Romney and former New York City Mayor Rudy Giuliani on the Republican side– will forgo the system’s matching money in the primary to join the race for a record amount of campaign contributions.  They have decided, with good reason unfortunately, that the cash flow and the constraints of a system created more than 30 years ago, are not able to keep up with the modern campaign. 

Opponents of the presidential public financing system, led by Senate Minority Leader Mitch McConnell (R-KY), have successfully rebuffed repeated attempts to update the system.  So it is no surprise that the system is not working.  But the system is like a car whose maintenance has been routinely ignored.  When the car breaks down, it doesn’t mean the car itself was a lemon, only that it was not sufficiently maintained by those who have a duty to keep it running effectively.           

So what can the American people expect in the 2008 Presidential elections since the presidential public financing system is not in good working order?

First, candidates are spending huge amounts of time raising money.  The most efficient use of that time is to spend it with donors who can fork over the maximum -- $2,300, or $4,600 if you include the general election.  Small donor events are certainly part of the mix but there is a premium on finding and securing donations in the thousands, not the hundreds.  While the Internet is providing an important new source of small donors, frontrunners will spend more of their face time with large donors who will expect to be remembered if and when their candidate is in office. 

Without a working presidential public financing system, collecting the maximum contribution is not even the most efficient use of the candidate’s resources.  Recruiting bundlers is.  Bundlers do the hard work of soliciting and amassing large amounts of contributions. This is vital in a presidential campaign that just saw the top two Democratic contenders announce more than $40 million combined contributions in the traditionally “slow” third quarter. 

While bundlers have played an important role in past campaigns – in the 2000 election, George W. Bush’s Pioneers ($100,000 bundlers) helped him roll over his Republican rivals in the primaries, they are even more important this time around.  The scandals surrounding bundler Norman Hsu demonstrate how the campaigns are having a hard time keeping up with the demands of vetting so many bundlers.  Both candidates Giuliani (“Team Captains”) and Clinton (“Hillraisers”) have already successfully recruited individuals who are charged with bundling more than $1 million in campaign contributions.  While many bundlers may be partly driven by their ideological beliefs, they are certain to expect their calls to be returned and their concerns listened to if their candidate wins elective office.  How many Americans can expect the same kind of attention to their concerns?

Without the presidential public financing system in good working order, the sky will be the limit for spending on television advertisements in targeted states.  Television advertising estimates for the 2008 elections have topped $3 billion with the lion’s share to be spent by the presidential candidates.  The presidential public financing system, with its spending limits, acted as a bit of a brake on this spending and, more importantly, provided those candidates with enough funds to ensure their message out, so they could compete in the field of ideas.  In this election, these non-frontrunners using public financing are going to have a very difficult time being heard as their well-heeled rivals buy much more air time.

Without the presidential public financing system in good working order, we are seeing other fundraising vehicles, particularly leadership PACs and so called “527” organizations, take on a more important role in the campaign. 

Leadership PACs are used essentially by politicians (incumbents and former  office holders) as political slush funds to pay for the ambitions (and sometimes personal whims) of politicians.  They are tapped to keep candidates in the public eye in the off-years, especially when they are not currently holding public office, to buy favor with state officials in key primary states, to pay for travel, and to cover expenses that are not directly related to the campaign.

The so-called 527 organizations have risen to prominence in the vacuum created by a crippled presidential public financing system and a Federal Election Commission still unwilling to promulgate common sense rules to treat many of them as political committees.  These “stealth PACs” will not only continue to operate in the shadows, but they will play a critical role in swing states in 2008.  With weaker disclosure requirements and their evasion of the source and contribution limits in federal campaign finance law, these 527s will provide an avenue for banned soft money to flow back into the presidential system.

Until the presidential public financing system is updated, second-tier candidates will have an even slimmer chance of succeeding which will further curb the nation’s political discourse.  It is a system that deserves to be fixed for the health of our democracy.  Regardless of what one thinks of the politics of Jimmy Carter, Ronald Reagan, Bill Clinton or John McCain, few would argue that the national political dialogue was expanded and enhanced by their presence.  The same can be said of others whose campaigns depended on the presidential public financing system. 

Most people forget, for example, that without the presidential public financing system, Ronald Reagan’s campaign would not have had the resources to stay in the game after January 1976 and thus provided the fuel for his successful 1980 campaign.  As the Campaign Finance Institute’s report “So the Voters May Choose” notes, at the end of that month, he only had $43,497 cash on hand while President Gerald Ford had 15 times as much in the bank.  If President Reagan’s campaign had not received the $1 million in public money in January of 1980 and another $1.2 million in February, his advisors have said they could not have continued, and the chances are that Washingtonians would not be flying in and out of “ Reagan National Airport” today.

It’s admittedly and unfortunately too late to get a handle on the fixes needed for the presidential public financing system in time for the 2008 election.  But updating the system for 2012 should be a top priority for both Congress and the new President.  Otherwise, the magnitude of the money and the imperative for candidates to collect it will continue to explode.  And as it does, the chances for enhanced dialogue about issues facing American voters will be diminished, while the power of those donors who can bring large amounts of money to the table will be magnified.   This is not a healthy way to run elections for the most powerful political office on earth.