Just $83.8 million? No thanks

Times Staff Writer

For the first time since the nation launched its grand experiment with publicly financed presidential campaigns three decades ago, major-party nominees in 2008 are expected to turn down all public funds.

The reason: The grant, expected to be $83.8 million, might not be enough to run a winning campaign.

Sen. Hillary Rodham Clinton (D-New York) is the first top-tier candidate to tip her hand that she intends to leave the public money on the table. Senior Clinton advisor Howard Wolfson said by e-mail Sunday that she would not take matching funds in the primary campaign or, if she wins the Democratic nomination, in the general election.


On her campaign website, Clinton suggests that donors give her $2,100 for the primary and another $2,100 for the general -- a sign that she won’t seek matching funds in the general election. Candidates who take public money in the general election must forgo fundraising.

Using her contacts and those of President Clinton, Sen. Clinton raised nearly $40 million for her 2006 Senate race, showing she could tap moneyed interests in New York and California, two deep wells of Democratic funds.

“She’ll do fabulously” in the money race, said Sacramento lobbyist Darius Anderson, who helps Democrats raise money and is a business associate of one of Clinton’s backers, Los Angeles billionaire Ron Burkle. “The Clinton network and the Clinton list is by far the most extensive of any Democrat.”

Abandonment of the public financing system would threaten the survival of a Watergate-era measure that was supposed to limit the influence of big donors in presidential politics and enable more candidates to compete.

If major candidates walk away from public financing, “it really calls into question why it exists at all,” said Federal Election Commission Chairman Robert D. Lenhard, a supporter of the system.

The system is being rendered obsolete by escalating campaign costs, sophisticated fundraising techniques, tepid public support and major candidates such as Clinton who could raise $100 million on their own before the first 2008 primary -- and $500 million by election day.

There are efforts to revive the system. “It is a reversal, but not necessarily a fatal reversal,” said Steven Weissman of the nonpartisan Campaign Finance Institute in Washington, among the groups pushing to rescue public financing.

But it remains to be seen whether the heavy spending forecast for 2008 will, as public-finance advocates predict, trigger public disgust and lead to changes.

Until then, “to be considered a top-tier serious candidate almost by definition means you’re not going to be participating in the public financing system” in either the primary or general election campaigns, said Democratic consultant Chris Lehane of San Francisco, who worked in the Clinton White House.

As originally envisioned, the matching funds system offered candidates a deal: In exchange for voluntarily limiting their spending, the federal government would provide them with tax money to defray primary campaign costs and relieve them of having to raise money in the general election.

Taxpayers pay for it by checking a box on their income tax forms earmarking $3. But despite outcries against the influence of private money in politics, the concept has not caught on with the public. At its height in 1980, 28% of taxpayers marked the box. Now, not even 10% ask that part of their taxes be used for presidential campaigns.

It’s a system that seems almost quaint in an age of Internet fundraising and in the face of other laws that have the effect of opening the way for big campaign spending. Though $83 million seems huge, it might pale by comparison with the sums that candidates could raise from private sources -- increasing the likelihood that nominees would leave the public money on the table.

“It is mind-boggling,” said Washington political consultant Jeffrey Bell, a Republican who supports public financing.

A few past candidates have turned down public money for primary campaigns rather than agree to limit their fundraising, a precondition for getting the taxpayer largesse. Ross Perot and Steve Forbes didn’t need it; they used personal wealth. In the 2004 primaries, President Bush and Sen. John F. Kerry (D-Mass.) raised more money than would have been permitted had they used matching funds.

But in every general election campaign, beginning in 1976 when Jimmy Carter beat President Ford, the nominees have accepted matching funds. In 2004, the FEC gave $75 million each to Kerry and Bush. With an inflation adjustment, the grant will exceed $80 million in 2008 -- if anyone takes it.

“The nominees of both major parties are likely to turn down public money for the general election for the first time in history, and raise private contributions for both the primary and the general,” Commissioner Michael E. Toner said in an interview.

The system is ailing for a variety of reasons. By law, the FEC bases its matching-fund increases on inflation, but the cost of campaigning has far outpaced inflation. Toner predicts that major-party nominees will raise $500 million each by election day -- roughly double what Bush and Kerry raised in 2004.

Fundraising itself has changed, aided by direct mail and the Internet. Legislation by Sens. John McCain (R-Ariz.) and Russell D. Feingold (D-Wis.) was intended to limit the influence of money in politics. But it also more than doubled the amount that individual donors could give to presidential candidates. That in turn has made it easier for candidates to raise yet more money.

The maximum that a single donor can give is $2,100 for a primary and another $2,100 for a general election, though the commission probably will raise that to $2,200 or $2,300 this year.

“Fundraising has changed so much that in order to ... get people to opt in to the public funding system, you would have to dramatically increase the subsidy and the amount that a candidate could spend,” said Anthony Corrado, a political scientist at Colby College in Maine who studies presidential campaign finances.

The law also provides candidates with millions of dollars for primaries -- so long as they agree to restrict their spending. In 2008, the cap on spending would be about $50 million.

The demand for money for 2008 is heightened by the heavily front-loaded primary calendar. Democrats will hold caucuses in Iowa and Nevada and primaries in New Hampshire and South Carolina between next Jan. 14 and Jan. 29.

(Republicans have not set their primary calendar.)

Campaign finance experts believe a candidate easily could spend $25 million in those four states, then face a crush of primaries in February, possibly including California’s.

As of last month, Clinton had $14.4 million in her campaign account. Several experts said Clinton could amass $100 million by the end of 2007.

Sen. Barack Obama (D-Ill.) and Republicans McCain, former New York Mayor Rudolph W. Giuliani and former Massachusetts Gov. Mitt Romney could raise similar sums.

By contrast, Bill Clinton had $3.3 million in 1991 as he headed into Iowa and New Hampshire.

“There is going to be a $100-million entry fee in this White House race,” Toner said.

Aides to at least one other candidate talk openly about his plan to bypass federal funds.

“Our intention is to opt out, but we will not make a final decision until later this year,” said consultant Roy Behr of Los Angeles, representing former Iowa Gov. Tom Vilsack, a Democrat running for the presidency.

McCain, though not tipping his hand, “believes the public financing system is not fulfilling its original goal and must be reformed,” said McCain spokesman Danny Diaz.

Advocates of public financing say the money race of 2008 will underscore the need to salvage the federal system. The Campaign Finance Institute, affiliated with George Washington University, suggests raising the match: $3 for each dollar that candidates raise in small sums. Then a $100 donation, for example, could be leveraged into $400. Feingold is expected to reintroduce legislation to raise the subsidy, though experts say a fix cannot be instituted in time for the 2008 campaign.

“The system has become outmoded and we need to fix it,” said Fred Wertheimer, long a proponent of public financing and head of the independent political watchdog Democracy 21, which also is pushing for an overhaul. “All the fundraising is going to make our case. The story is going to demonstrate why the [public financing] system makes sense.”

But others question whether the public will lament the demise of a system derided as “welfare for politicians.”

Darry Sragow, a Democratic attorney and consultant in Los Angeles, said most voters saw no benefit in spending tax money on politics.

“It is the height of irony, if not insult, to say to a voter: ‘We’re going to take your money and send you all that mail you hate, and produce all the negative ads that make you want to use the remote,’ ” he said.



Public campaign financing

After Watergate, Congress enacted a law making public funds available for presidential campaigns. Beginning in 1974 with $20 million, the pot available to major-party nominees in the general election* has grown with inflation:

*--* 2008 $83.8 million** 2004 $74.62 million 2000 $67.56 million 1996 $61.82 million 1992 $55.24 million 1988 $46.1 million 1984 $40.4 million 1980 $29.44 million 1976 $21.82 million


*Public matching funds are also available for primary candidates who agree to limit their spending. The limit for 2008 will be roughly $50 million. Grants are given dollar for dollar on up to $250 in individual donations.


Source: Federal Election Commission