Senator Obama and the Decision to Opt Out of Public Financing

Today's NY Times editorializes that Senator Obama, should he be the Democratic nominee, should opt into the public financing system in the general election:

Earlier in the campaign, Mr. Obama vowed to accept the tighter alternative of public subsidy and its spending limitations -- a not-so-shabby $85 million for the general election -- providing the Republican nominee does the same. Mr. McCain seems ready to do that, and we hope he does. Should Mr. Obama renege, he would become the first presidential candidate to reject the general-election limits.


Should he honor the pledge, Obama campaigners fear being overpowered in a parallel money assault waged by way of the Republican Party's deep coffers in battleground states and well-financed shadow-party attack groups.

Facing such a dilemma is the stuff of political leadership. As a candidate running against money-driven Washington, Mr. Obama should follow his initial instinct to defend the public alternative. Otherwise, the 2012 campaign will become an even less inhibited chase after special-interest donors. Even with the Obama Web boom, a good half of all primary money -- some $366 million -- still comes from individuals giving $1,000 or more.

It seems to me that this editorial makes a number of points, none of which likely will (or should) compel Senator Obama to take public financing in the general election:

1.The Pledge. I've argued in detail in this Findlaw piece that it is fair to characterize both Sens. McCain and Obama as having gone back on forth on opting into public financing as their political fortunes changed. I conclude that neither candidate can be faulted for changing his mind. The public financing system is broken, and even candidates with an ideological commitment to public financing generally will have problems with the current campaign financing system.

Let's put this in perspective with some numbers. In the 2004 primary season, President Bush raised over $258 million for the primary, and Sen. Kerry raised $241 million. If they would have opted in during the primary season, they both would have faced a $50.4 million cap on their spending. It would have been political suicide for Kerry to have opted in, even if he believed in public financing, in the face of President Bush's decision to opt out.

That lesson was learned by all the serious candidates in 2008. The only candidates who opted in were candidates who had weak fundraising potential. So far, according to the latest Campaign Finance Institute report (all the rest of my figures in this post are from that report), Sen. Obama has raised $263 million so far in the primary period (and will no doubt set a record for the amount of financing raised in this period). Senator Clinton has raised $198 million so far (though she has $19 million + in debt), and Sen. McCain has raised $97 million so far. Again, even a candidate committed to revitalizing the public financing system would be committing suicide to have opted in in the 2008 primary season.

2. $85 million is shabby The Times writes that this amount is "not so shabby," which explains why Senator McCain is opting in. I think that's wrong. I think Senator McCain is opting in because he figured (1) he is likely not to be able to raise as much as Sen. Obama if they both opt out, and by opting in he can try to embarrass Sen. Obama into opting in; and (2) opting in is not a big deal for Sen. McCain, because he is likely to raise a ton of money with the RNC, which is subject to more generous contribution limits. So he's not planning on running his campaign on just $85 million. To speak of the decision to opt in today as a decision to decline private financing fails to recognize the reality of the situation.

3. The Obama "web boom" is a big deal The Times focuses on the fact that half the primary money overall has come from donations "above $1,000." Of course, thanks to McCain-Feingold, these donations are capped at $2,300. Let's look what has happened with small donations so far this year. Overall, in 2004 donations of $200 or less (what I've termed "micro-donors") made up 28% of the total of donations raised by all candidates in the primary system.

This primary season so far, these micro-donors have made up 35% of the total donations. (On the Democratic side, it has been 40%, on the Republican side, 27%). Sen. Obama alone, however, has raised nearly half of his donations (47%) from small donors giving under $200, and about one-third in donations from $1,000 to the $2300 maximum. This is a big deal. I think it is a misnomer to call it "partial public financing but I think it is fair to say that this "web boom" of small donations gives egalitarians something to cheer. If there is going to be a revitalization of public financing in the future, it likely will build on this kind of micro-donor enthusiasm through generous matching funds which would give candidates who have greater private support some greater public support. (That's much like the voucher plan I've long championed.)

In sum, I don't think either candidate at this point should be castigated for opting out of the public financing program or praised for opting into the broken system that is easily circumvented through party donations. Instead, those committed to a working public financing system should praise the candidate or candidates who pledges to fix the system when he or she gets into office with a plan that harnesses the power of the micro-donors.


Cross-posted on The Election Law Blog.

Comments

[PhDiva]

Why should Obama follow public financing when McCain already exploited the system in a way that may not even be legal?

If he limited himself to public financing the republicans would crush him.

He should be willing to lose this battle by changing his mind so that he can win the war by having enough money to win the election.

[frustratedinohio]

I disagree with all your reasons Obama won't honor his pledge, except for one. He believes he can raise more on the web. Which in a way is selfish because he expects people in a lousy economy to keep supporting him in the manner he's grown accustom to.

[UrbanRevolution]

HE CANNOT DO PUBLIC FINANCING WITH THE SWIFT BOATERS GEARING UP TO ATTACK

[Alecki]

Is anyone in the media going to investigate Senator Obama.

There are so many issues about this man that have not been answered to this day.
Don't we need to have a transparent candidate running for the most important job in the world?

What is his involvement with Anton Resko?
What is his involvement with William Ayers, the domestic terrorist.
How do the Muslims overseas view Obama as a leader in the United States
Does Obama have the views of his church that practices Black Liberation Theology?
Why doesn't he talk about his father?
What involvement does he have with "The Woods Foundation' Did he invite William Ayers to his home?
Why did he lie during the debate about his Church supporting Louis Farrakhan as one of their honored members.
Why does he continue to attend his church, Trinity United Church of Christ.
Why is his middle name "Hussein". Where does this name derive from.
Why did one of his advisors meet with Hamas. Last week the NY Times he was let go. What was that all about?
Why was Obama on the cover of Trumpet Magazine with Louis Farrakhan.
Did Obama attend the Million Man March?
Could he please explain the Black Liberation Theology that his church practices.

These items have been discussed on mulitple sites and news stations.
If Hillary did anything like the above or was involved with these people, I would like her to explain it to America also.
This is serious.

[gadfly55]

I am in the 20% who gave more than $200, less than $1000 to Obama and glad to give it. With 1.5 million donors, it can be expected he will raise more than $500 million. That terrifies Republicans.

[Daly]

Absolutely Not.
The 527s are out in force backed by McCain's lobbiest team, plus we have all lived through the post fact handling courtesy of the surpreme clowns.

McCain had no control over the republican party and there has been countless examples of he himself skirting the rules; like McCain bank loan that was not a loan, using wife's plane for free, lobbiest running the show that think that American's do not care where they get their dirt $, Liberman proundly being the sponsor of 527 ads, Rush Limbuagh's free hate air waves and the MSM has no answer to Faux new propaganda this all says that the playing field is not level and Obama would be stepping onto a field of landminds with constant 527 sniper fire. As Nancy R said, Just say NO.

[condew]

With no FEC, there are no rules.

McCain is currently in the public finance system for the primary, and has blatently violated the law. If there were an FEC, he would be subject to 5 years in prison for his offence.

Under such conditions you do NOT unilaterally disarm.

[SpaceCadet]

Obama should cite the Bush Supreme Court's ruling that corporations can now run 527 attack ads right up until election day, contrary to the law in place when Obama made his pledge. He has every reason to argue that that decision renders his previous pledge null and void.http://www.huffingtonpost.com/images/comments/post_comment.gif

[Indubio]

Obama should eschew public financing without apology. His campaign has been raising funds through small donations and in effect this represents public financing. Until Congress cleans up elections by outlawing PACs and special interest campaigning, and, until such laws are upheld by the courts, Democrats should leverage their progressive positions on various issues as much as possible. The GOP understands that even with their rich donors, Republicans cannot out raise a Democratic candidate who has the support of millions of voters who have demonstrated their willingness to support a candidate who espouse progressive policies.

[kevinw]

You made a campaign pledge that only Mccain would possibly agree to. At the time, it looked like Obama would be facing Gulliani or Romney. Neither of these guys would ever agree to public financing. It looked like a safe bet to be promoting a system the party gives lip service support to. Mccain can't get decent fundraising. So he is agreeing to do the public financing. Now we are in a put up or shut position. This year we are the ones with the money advantage. As I said before this is a put up or shut up moment. I don't think Obama can afford to give up his financial advantage in this race. However, as a party we need to drop this issue from our repertoire. We have shown that the real issue was that we did not have the money before. Now that we have it we don't like Public Financing so much.

[condew]

If there was an FEC with a fair-minded quarum to act.
If McCain was not already cheating.
Then maybe.
This does not discredit the idea of public finance, it just demonstrates that when your opponent is dishonest abd there is no enforcement, only a fool would participate.

[frustratedinohio]

"We have shown that the real issue was that we did not have the money before. Now that we have it we don't like Public Financing so much."

Wow kevinw, are you serious? It's okay to make a promise, then when the situation changes go back on the promise? I think in some circles that is known as a lack of integrity.

[Keith52]

This is baloney, it's too late to get into this. The time to change the system is before the primaries and before any fund raising has begun. This is a distraction.

[booksnmore4you]

I think it would be a tragedy to limit the voice of the micro-donors through opting into an $85-million public financing scheme.

[xcrunner77]

The Republican party of North Carolina showed what would happen in a general election. McCain asked them to not run a nasty ad: they ran it anyway. At the national level McCain will not be able to rein in the 527s.

Obama cannot accept public funding as long as the Swift Boaters are allowed to spread whatever lies they want. He would be unilaterally disarming if he were to take public money.

Until there is some way to keep the Swift Boaters from running their crap, public funding is not an option if you can afford to avoid it.

[NYC07]

If the Republicans were not such a shady back door, stab you when you"re not looking, sell their mother for a buck, group of people then I'd say public funding was fine - but they are! Obama needs every cent he can raise to battle this plague on the People of America.

[unscum]

Obama should opt out, the RNC has 5 times more money than the DNC and all that corporate money is going to go to helping John McCain. 30 to 40 million a month will give Obama the edge in defeating both John McCain, the RNC and those swiftboating republican 527.