Sen. Barack Obama's comments last week provided grist for renewed speculation about whether or not he will accept public financing for the general election. With no apparent sense of irony, he said to a roomful of donors at a high-ticket fundraiser that "we have created a parallel public financing system" of free-flowing Internet donations.
This remark may be a signal that Obama is considering using private money for the general election, which would make him the first candidate to do so since the election of President Nixon (before public funding was an option). It certainly is a clear sign that the explosion of small donors will require us to take a fresh look at the structures of campaign finance law.
But it will not help us move forward if enthusiasm for this influx of small donors obscures the facts. Money from large donors is not exactly going the way of the dinosaurs -- 79 bundlers for Obama have hit up their friends for aggregate contributions of $200,000 each. Still, it is certainly indisputable that having more small donations and less reliance on a tiny pool of wealthy people is a happy development in a democracy.
A true public financing system allows candidates to avoid $2,300-a-person fundraisers like Tuesday's event. But it could look quite different from what we have now, which forecloses any private fundraising in the general election if a candidate accepts a public grant. Indeed, the development of a "parallel" system suggests a way to update the moribund presidential public funding program.
Coupling a substantial grant of public funds with the opportunity to raise contributions of $100 per person, perhaps up to a pre-set cap, would enhance debate and combat corruption, while encouraging participation by throngs of small donors. Public funding could further magnify the impact of small donors, as it does in New York City, which provides a 6-to-1 match for every dollar up to $175 of each matchable contribution to a local candidate. This program pushes candidates to focus on grassroots fundraising, house parties, and potlucks -- thus boosting civic engagement while making it possible for neighborhood leaders to seek office. It hasn't ended corruption, of course. And the success of billionaire mayor Mike Bloomberg shows it hasn't ended the role of wealth in politics, either. But it has boosted competition and improved the independence of those in office.
Either option also would enable candidates facing independent expenditures to raise funds for response. There has been much talk already in this election of the collection efforts by outside groups that intend to spend millions of dollars to "frame" the opposing candidate or protect their own. With small donor fundraising, candidates would have a chance to compete with the unlimited spending by special interests.
The current system addresses the problem by allowing the presidential candidates to accept public money in the general election, while their parties "independently" raise and spend still more cash using their names. It would be far preferable to move on from this wink-wink system to one in which candidates will have enough funding of their own to respond to the predictable attacks.
A handful of large grassroots organizations, from environmental organizations to the National Rifle Association, would likely benefit by acting as Internet-based "bundlers" for these contributions, so we should also take another look at the disclosures required for this kind of activity. Bundling activity on the Internet should be the subject of simple transparency rules similar to those passed by the Congress last year for federal lobbyists, in order to allow voters to see which entities are seeking to influence candidates.
This year, with its wide-open presidential race, is highly unusual, and Obama's ability to inspire small donors may not be an elixir available to other candidates, or in other races. On the other hand, Sen. Hillary Clinton also has raised a large number of small contributions, and it does seem clear that the more we keep this going, the better off we all will be.
In this fast-changing landscape, the future of campaign finance is now. The best of all possible worlds would be to combine the energy and enthusiasm of small donors with a public funding system that ensures that, in the end, the voices of those donors are the ones that will matter most to candidates.