Public funding of campaigns at crossroads

Revisions still leave flaws, analysts say

Public financing of presidential elections is on life support, and Barack Obama, a Democrat who has always embraced the concept, appears to have pushed the program nearer to extinction.

As the first major-party candidate to forgo public financing for the general election since the reform measure took effect in 1976, Obama has continued to raise private funds at an astounding, record-smashing rate.

With the election only four days away, he was still pitching yesterday with a new gimmick, a blast e-mail soliciting new donations with a promise of prime seats at his planned, massive Grant Park rally Tuesday night in Chicago for five individuals who make their first donation to his campaign. Not only that, "We'll fly you in and put you up in a hotel for the night," Obama said in the e-mail.

As of Oct. 15, his campaign had raked in $639 million and is on pace to exceed $700 million. The previous record was held by President George W. Bush, who collected $270 million four years ago, while his Democratic rival, John F. Kerry, took in $235 million. However, both accepted public financing - and the spending limits that went with it - for the post-convention phase of their campaigns.

Obama's opponent, Republican John McCain, has been at a steep financial disadvantage in the closing weeks of this race after accepting the public grant of $84.1 million to fund the last eight-plus weeks of the campaign. McCain has bitterly attacked Obama for his decision to back out on a commitment made last year to take public funding if McCain did.

Obama's campaign "has directly profited from his broken promise," McCain said during a speech in Florida earlier this week.

Obama's campaign spokesman, Nick Shapiro, said yesterday that Obama still supports public funding but "cannot fix it by embracing it in its broken state. He can, however, make it a priority as president to fix it through the reform legislation he has co-sponsored - and he has made that commitment."

That's a reference to legislation filed last December by Senator Russell Feingold, Democrat of Wisconsin, with Senator Susan Collins, Republican of Maine, and designed to modernize - with increased funding and other incentives for candidates to participate in public financing - a reform measure that was designed to limit the influence of special-interest money in presidential elections after the Watergate scandal.

Obama was among the six Democratic cosponsors of the bill, a variation of other measures that have failed to advance in Congress in recent years.

McCain and Feingold were co-sponsors of the 2002 campaign finance law that banned parties from soliciting unlimited donations, known as "soft money," and placed restrictions, some since struck down by the US Supreme Court, on electioneering advertisements by advocacy groups.

But at the same time, the role of individual donors has grown exponentially.

Over the past four campaign cycles, private donations to candidates have skyrocketed, from $256 million in 1996 to more than $1.5 billion this year, the first campaign without an incumbent president or vice president on the ballot in more than half a century.

At the same time, the amount of public money has declined, starting with George W. Bush's decision to opt out of public financing for the nomination phase of the 2000 campaign, and accelerating in 2004 when Democrats Kerry and Howard Dean bypassed primary season public funds. In this cycle, eight of the top candidates for their parties' nominations did not seek public funding during the primaries.

A key element of any change, advocates say, must be eliminating restrictions on spending in each state primary for candidates who accept public matching funds of up to $21 million per candidate. That is a major reason why more candidates have bypassed public matching funds during the nominating process.

The federal program, now funded by the voluntary $3 checkoff for individuals on tax returns, could require additional financing if candidates are given more public money under a revised law. Participation in the checkoff has declined steadily from a high of nearly 29 percent of all returns in 1980 to 10.9 percent in 2006, according to the Internal Revenue Service.

Lack of public attention may account for some of that. A Gallup poll this week showed general support for public financing but not much awareness of the issue. More than 60 percent of those surveyed had no idea whether McCain or Obama had taken public funds, and of the rest, some of those who guessed were wrong.

Reform advocates have pushed for updating of public financing for years to keep pace with changes in the way money is raised by the well connected, who bundle contributions from friends and associates, and to account for the fact that the once drawn-out nominating calendar has become front-loaded.

"The influence of a person who has collected $200,000 or $500,000 or $1 million is potentially enormous in terms of appointments in a new administration or in terms of access," said Stephen Weissman, associate director of the Washington-based Campaign Finance Institute, a nonpartisan research group that supports public financing.

Weissman said campaign finance reformers have received a chilly reception in recent years in the nation's capital.

"Obviously the outlook is not good," he said. Since 2003, the group has been working with a bipartisan group but has little to show for the reform effort.

"Despite studies that show, if you ask the question in a neutral way, a majority of the public supports it, we haven't found much appetite in Congress for fixing it," Weissman said. Many Republicans in Congress generally oppose the concept on a philosophical level, but even among Democrats, the party that pushed the post-Watergate reforms, Weissman said "There's very little enthusiasm. . . . There's been indifference in the political class."

"Certainly, there are problems with the system, but the system was broken before this election cycle; the primary system is particularly ham-handed, said Laura MacCleery, deputy director of campaign finance at the Brennan Center for Justice at the New York University School of Law.

"But I'm not sure it's an uphill fight if the bill deals with the changes that have happened in the landscape," she said. "There's a lot of popular support for this program among voters, and it crosses partisan lines."