Three Dems might opt out of campaign finance system

I think it's unlikely this will actually happen, but the Wall Street Journal reported Friday that General Clark has joined Senator Kerry and Governor Dean in "considering" the option to opt out of the presidential public financing system. Political Wire: Clark May Forfeit Public Funding

There has been a vigorous debate among campaign finance reform advocates about whether to attack Democrats who opt of the system, as George W. Bush and Steve Forbes did in 2000, and Bush certainly will this time. (It would be good if the press would always mention that he'll opt out of only half of it, raising unlimited sums from his "Rangers" and "Pioneers" for a "primary" that doesn't exist, then quite happily accepting a public subsidy for the general election.)

My own view is that,

since we all know that the law is horribly flawed, it's unreasonable to demand that candidates obey a law that none of us think works very well, especially when they are facing others who aren't participating. And even if they opt out of the public financing system, the candidates would continue to comply with the limit of $2,000 for individual contributions to their campaigns; it's the overall spending limits for the period up to the nomination, and the state-by-state primary spending limits that they could elude, in exchange for giving up matching funds.

The overall spending limit in the matching system creates one problem for candidates: each will be limited to just under $50 million in the primaries, and the nominee will not receive additional public funds for the general election until the party convention. Fifty million dollars will be enough to compete for the nomination, but the eventual nominee is likely to have spent all or most of that by the time the nomination is really decided, probably in March. That will leave six months when the non-participating President Bush will have somewhere between $170 million and a quarter of a billion dollars, against the Democrat's $0. Opting out provides one way to keep the option of raising money for this long "dark period." The other problem is that the system sets limits for spending in each state -- the New Hampshire limit for example is only $730,000. Most campaigns get around that limit by buying a lot of Boston and Portland, Maine, television time, having staffers spend their nights in hotels across the borders, etc., but it's quite a constraint, and probably a particularly big one for Clark, whose late start requires him to concentrate on one or two early states, and who, unlike Dean and Kerry, doesn't just happen to have his campaign headquarters an hour's drive away from New Hampshire. (Here's some info on how the limits work.)

And the incentives aren't necessarily worth accepting those constraints, especially after the increase in the contribution limits to $2,000 a person, which was passed as part of the McCain-Feingold reform. Since only the first $250 from a contributor is matched, a candidate who agrees to spending limits might technically get as little as one-eighth of the total raised in additional public funds. (In 2000, when the contribution limit was still $1,000, the major participating candidates -- Gore, Bradley and McCain -- each received a little less than 30% of their total in public funds. This year, 20% is a more reasonable guess.)

So if a candidate is better off opting out, especially if Bush is already out, I don't think there's any point in criticizing that choice. Sure, the system won't work if people don't participate, but the system doesn't work, period. However, we also have to get some energy behind the movement to fix it. And one way to do that is to make sure that candidates who do opt out are asked to take a very strong stand in favor of the major reforms that would make the presidential public financing system work.

One of the bright spots in the world of campaign finance recently has been the success of systems of much more generous public financing, such as in Arizona and New York City. In Arizona's "Clean Elections" system, a candidate like current governor Janet Napolitano can raise a large number of $5 contributions to show broad support, and then, in exchange for agreeing to accept no additional public funds, receive public money sufficient to run a full campaign. In New York, the first $250 of contributions are matched, but not one-for-one as in the presidential system; rather, the match is four-to-one, so a $100 contributor is actually worth $500 to the candidate. Again, the candidate must agree to limits. The systems have very similar effects, encouraging most candidates to participate, helping candidates raise money from ordinary voters, rather than lobbyists and the super-rich (Napolitano talks about holding "five-dollar parties" on reservations, in the ghettos of Phoenix, and in the rural Hispanic communities of southern Arizona), and equalizing spending. The New York City system was somewhat obscured in 2001 by Mayor Bloomberg's spending $73 million of his own money, but in every other citywide race, and in the city council races that year, more than 95% of candidates participated in the system, we had elections with as many as eight well-qualified and well-matched candidates, and candidates, successful or unsuccessful, are generally enthusiastic about the program.

If the presidential public financing system is perceived to have failed, it will be a black eye for public financing of all kinds, and make it harder to extend these experiments to the federal level. But we know why the presidential system doesn't work and why the Arizona and New York City systems do. Rather than trying to discourage the presidential candidates from opting out, reformers should make sure they carry the message that the system can be fixed back to Congress or perhaps to the White House. Senator Kerry is already the lead co-sponsor of legislation to create a congressional financing system modeled on the Arizona experiment; if he opts out, I assume he will put his name behind an effort to fix the presidential system on a similar basis.

My own view on the details is that something like the New York City system, where small contributions generate a big match, would work best in the presidential system, and would particularly help those candidates who seem to be receiving large numbers of small contributions. The all-or-nothing quality of the Arizona system will be difficult, though not impossible, to adapt to a presidential system in which a series of elections, rather than a single one, determine the nominee. The Campaign Finance Institute, a seriously bipartisan group that brought political scientists and others together to figure this out recently came up with some good recommendations as well: (link to executive summary of report)

But the bottom line is that the details don't matter: It will take a few years to fix this system, and right now, the problem is absolutely nowhere on the congressional agenda. Let's get a few ideas out there, and make clear that it can be fixed, and that we can get near-100% participation, perhaps even from the George W. Bush's of the future, if we pay attention to the successful system. If we can't persuade the candidates to participate, they should at least help get this message out.