The nuts of bolts of presidential campaign financing will probably be an issue next year; less so if the eventual Democratic nominee (perhaps Dean) opts out of the system.
Presidential Campaign Law Shows Its Age
Slipping Taxpayer Interest, 2002 Overhaul’s Effect Threaten to Make Measure Obsolete
By Jeanne Cummings
Wall Street Journal
August 16, 2003
The three-decades-old law governing the financing of presidential campaigns appears to be breaking down, with the evidence of its collapse littering the 2004 campaign trail.
A post-Watergate system designed to limit special-interest influence and level the playing field, by offering candidates public matching funds in return for spending limits, is doing anything but. An expedited primary schedule, dwindling taxpayer support and unintended consequences from last year’s campaign-finance overhaul threaten to render it obsolete.
So as the Supreme Court considers the legality of last year’s landmark law, its backers have set their sights on rejiggering how presidential campaigns are paid for.
Their leading exhibit is President Bush, who will repeat his strategy of the previous election by declining to take public matching funds and instead finance his 2004 primary effort solely through individual donations. While the president’s decision pleases those who oppose using any taxpayer money for campaign costs, it also is highlighting a huge advantage he gained due to the doubling of donation limits in last year’s overhaul law.
Democrats vying in a crowded primary field, who are playing within the matching system, will be allowed to spend about $45 million to win their party’s nomination, while Mr. Bush is expected to spend about four times that, or nearly $200 million – on a lineup of uncontested primaries. Mr. Bush is likely to move into the federally funded system for the general election campaign, but he will be free to fire away at Democrats with his massive war chest before then. In response, Democrats say, former Vermont Gov. Howard Dean now is considering whether he, too, should take advantage of his unexpected fund-raising prowess by opting out of the system and raising – and spending – as much cash as he can.
“This presidential campaign is going to be the best evidence of the need for reform,” says Massachusetts Democratic Rep. Martin Meehan, a sponsor of last year’s campaign-finance legislation.
Even within the matching system, there are problems. Its funds are raised from taxpayers who indicate on their tax returns that they are willing to see $3 of their taxes go to campaigns, through an account called the Presidential Fund. But the percentage of taxpayers contributing to the fund has been declining for years.
Consequently, the Federal Election Commission doesn’t expect to have enough money in January to fully meet its obligations to all the Democratic primary candidates. That means the checks will arrive in a couple of installments – and some candidates may have to take out loans to get through the early primaries.
The system for bankrolling the splashy national conventions also is troubled. Last year’s campaign-finance legislation banned so-called soft money, the unlimited checks from corporations, unions, and individuals that often raise conflict-of-issue questions. But just last month, the FEC decided to allow such donations to pay for party conventions.
In short order, the New York committee organizing the Republican National Committee nailed down promised donations of nearly $60 million from a dozen or so donors, raising some of the same conflict-of-issue questions the new rules were supposed to stop. Among the New York donations are million-dollar commitments from executives with Citigroup Inc. and Goldman Sachs Group Inc.
At the same time, the Boston host committee for the Democrats’ national convention quickly implemented payment schedules for millions in promised donations, a spokesman says. Among the Boston supporters are several pharmaceuticals and health-insurance companies, including Blue Cross and Blue Shield of Massachusetts; that company’s interests sometimes are championed by Massachusetts Democratic Sen. Ted Kennedy, who helped secure the convention funding.
The fractured state of the law has sent Mr. Meehan and fellow reformers – Republican Sen. John McCain or Arizona, Democratic Sen. Russ Feingold of Wisconsin and Republican Rep. Christopher Shays of Connecticut – back into strategy sessions. They are considering amending a pending lawsuit against the FEC to challenge the ruling on soft money for convention, and introducing new legislation.
The irony is that until recent years the presidential-campaign system appeared to be the one area if campaign-finance law that was working well. Last year’s attempted overhaul – the so-called McCain-Feingold law – dealt with the other parts of the campaign-finance system, principally by ending the national parties’ use of unlimited soft-money contributions and the thinly disguised “issue ads” on behalf of candidates that amounted to backdoor contributions from special-interest groups.
Now, though, reformers are taking aim at the presidential system as well. Among the changes under consideration:
--- Raising the amount the federal government gives to candidates who agree to limit their spending, to make it more worthwhile for them. Currently, the government matches the first $250 a candidate raises from an individual. One proposal would increase the match to the first $750. Such a raise is necessary, advocates say, because lawmakers last year doubled the amount individuals can contribute to campaigns, but didn’t change the public match on that money. That paved the way for Mr. Bush to double his fund raising this cycle, and offered no corresponding incentive for others to remain in the system.
--- Allowing candidates earlier access to matching funds. As states move up their primary dates, candidates have to spend money earlier in the cycle. Yet the FEC today doesn’t release its matching funds until January of an election year. An earlier release would provide an infusion of cash more closely timed with peak primary spending. Backers of the changes also are talking about expediting release of general campaign funds to midspring. Currently, that money isn’t released until after the nominating conventions, which traditionally occur in the late summer.
--- Boosting the amount of money taxpayers can designate to the Presidential Fund and launching an aggressive effort to educate the public about the program. For instance, many taxpayers think the $3 donation will come out of their own pocket. It doesn’t; it means that $3 of a donor’s tax bill will be set aside. Mr. Meehan would like to see the set-aside boosted to $5 per taxpayer.
--- Lobbying accountants and other tax-preparation services to make it easier for taxpayers to donate to the fund. For instance, two of the biggest software programs for preparing tax forms, Intuit’s TurboTax and H&R Block’s TaxCut, automatically check “no” in the presidential fund box if the taxpayer doesn’t do otherwise. Many accountants do likewise, as Mr. Meehan found out when he had to have his tax returns redone so he could make a contribution to the account.
David Magleby, a campaign-finance expert at Brigham Young University, says failure to address the problems in the presidential campaign-financing arena in last year’s legislation was “a glaring omission.”
But that law’s backers say politics wouldn’t permit it. Mr. Bush was unlikely to sign any legislation that reflected badly on his 2000 fund-raising operation or diminished his financial advantage in 2004, they argue. Chances may be better this cycle. If Mr. Bush wins re-election, he won’t be on the ballot in 2008 when any new law would take effect; if he loses, a Democratic president might be more willing to see such a new law enacted. |
