Imagining a Revitalized Public Financing System

| Thu Nov. 13, 2008 1:25 PM EST

Now that there is an Obama-sized hole in our public financing system, we need to find a new way to fund presidential elections.

The public financing system as it existed pre-Obama gave candidates tens of millions of dollars to use after the conventions (the amount went up each cycle) in exchange for halting direct fundraising (various party organs and committees could keep raking it in). But Obama opted out of that system because he had millions of small donors who could, collectively, give him much, much more than the federal government. And that's a good thing. Legions of small donors getting behind a candidate is a manifestation of democracy that shouldn't be denied. But how do we protect our elections from the influence of large donors while still allowing these small donors their voice?

Fred Wertheimer, president of Democracy 21, took a stab at figuring it out in an op-ed in the Washington Post:

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Move the small donor to center stage for all candidates. Presidential primary candidates should receive a match of $4 in public funds for each dollar raised, up to a maximum of $200 per donor, with no matching funds provided for contributions from a single donor that aggregate to more than $200. This would create powerful incentives for donors to give and candidates to raise small donations online. A $200 contribution, matched 4 to 1, would become just as valuable as a $1,000 contribution, and the importance of bundlers would significantly diminish....

The spending limits in the current system should be increased for the primary and general elections from current levels -- $50 million and $84 million, respectively -- to $250 million per election. This should be accompanied by an exemption from the spending limits for aggregate contributions of $200 or less per donor to further increase the importance of small donors and to provide candidates with greater flexibility to meet the costs of their campaigns.

Reduce the individual contribution limit. A presidential candidate who participates in the primary system should have to abide by a lower contribution limit than the existing maximum, $2,300 per individual, to take effect once the candidate has raised a threshold amount of seed money to get started. Under this approach, the relative importance of $200 contributions would be further increased, and the importance of bundlers further reduced.

I like it. I've never bought the argument that the wealthy have the right to donate in huge amounts because their donations are a form of political speech. Under Wertheimer's approach, they'll have the right to donate (and "speak") just as much as everyone else. They don't get a bigger say in our democracy simply because they have more money. (By the way, it's not surprising that the only folks who ever advance the argument that money = political speech are the wealthy themselves or the political candidates in position to benefit from unchecked giving by the wealthy, i.e. Republicans.)

Wertheimer, who recently spoke to Mother Jones about the good government agenda, highlights one other egregious aspect of fundraising law in the Post:

Close the loophole for joint fundraising committees. This year, both major-party presidential nominees used candidate and party joint fundraising committees to skirt the limits on contributions to candidates. John McCain solicited contributions of as much as $70,000 per individual and Obama of as much as $30,800 per individual for these committees; they raised $177 million and $172 million, respectively, according to Public Citizen.

The joint fundraising committees are a good example of how regulating political money is like holding Jell-O. You try to squeeze it on one end and it comes out the other. Every time regulators and good government reformers put a cap on something or close a loophole somewhere, politicians and their moneymen find a new way to get around the rules. But you have to keep battling, for the sake of the system's purity. Wertheimer is fighting the good fight.

Update: More coverage of good government issues over at Drum's, where I'm pulling double duty.