Skip to content

BCRA Works, So Let’s Focus on Presidential Fundraising Now

Campaign reform worked in 2004, as even sharp skeptic David Broder admitted recently. The parties, including the Democrats, thrived, small donors increased dramatically, and much of the corporate and union money, no longer subject to shakedown schemes by office-holders, stayed with the companies and unions, or went into their own voter registration and get-out-the-vote efforts. [IMGCAP(1)]

But the success of the Bipartisan Campaign Reform Act does not mean the problem is solved. BCRA fundamentally dealt with Congressional campaigns, except for the increase in individual contribution limits to candidates and parties. It did not otherwise affect the presidential campaign funding system.

That system, untouched since 1976, relies on a combination of matching public funds for candidates for presidential nominations who raise significant amounts in small donations, in return for spending limits in each state and overall in the primary process. It also provides federal funding in general elections for candidates who agree not to raise or spend any additional private money in their campaigns. It is funded through a $3 check-off by taxpayers on their income tax returns.

The system worked pretty well for almost two decades. But it was clear early in the 2000 cycle that it was broken; the flaws were magnified by the 2004 cycle. President Bush for the second time opted out of the matching funds because of his extraordinary ability to raise money without it; this time he broke all records by raising $270 million — six times the $45 million overall limit available to candidates who opt into the system.

Two Democrats joined Bush in opting out: former Vermont Gov. Howard Dean and Sen. John Kerry (Mass.). Kerry, of course, showed his own awesome fundraising prowess, raising $235 million. But if neither Dean nor Kerry had won the nomination, the Democratic nominee would have been totally out of money by March and temporarily unable to raise or spend any more, leaving the president with a $200 million edge until August. And Kerry did end up with a serious roadblock: He was required to stop fundraising or using his primary funds at the time of the Democratic National Convention, while Bush could keep at it until the GOP convention five crucial weeks later.

That Bush was able to raise enough to opt out in 2000 gave him a huge advantage over his rivals, who were severely handicapped by the draconian state-by-state spending limits. The same edge accrued to Dean and later Kerry in 2004. If the system is unchanged, and the limits stay the same for 2008, more candidates will drop out of it, and those who stay in (including some without large wealth or a fervent ideological base, but who might be good candidates and good presidents) will be at even more of a disadvantage. Neither party starts the 2008 cycle with a George W. Bush; each could be hurt by the continuation of the status quo and benefited by reasonable reform.

In the meantime, participation in the check-off has declined enough to threaten the system with bankruptcy. One of the main reasons for the decline is that tax preparers, from H&R Block to TurboTax, do nothing to encourage participation and often actively discourage taxpayers from checking the box even though it will not cost them anything extra.

Frankly, the problem is not that the basis of the system is broken; the theory behind it is pretty sound. Fixing the system does not require reinventing it, merely incremental adjustments. A sensible road map to those adjustments has been put out by the chairman and vice chairman of the Federal Election Commission, Scott Thomas and Michael Toner. Yet again, the two have shown that bipartisan cooperation for constructive ends is still possible in today’s Washington.

Toner, a Republican, and Thomas, a Democrat, suggest that Congress take a series of steps to update the system, taking into account the experiences of the past two cycles. They recommend (among other things) sharply raising the primary spending limit from $45 million to at least $75 million and probably much more (erring on the high side); raising the amount of matching funds a primary candidate can get and doubling the match, from $250 to $500, indexed for inflation; raising significantly the threshold required by a candidate to qualify for matching funds; making the matching funds available earlier in the cycle; erasing the state-by-state spending limits; taking away the advantage of the last-nominated candidate by making the money usable and available to both at the same time; and sharply increasing the check-off amount on tax returns, indexing it to inflation as well.

Even as Thomas and Toner are renewing their call for Congress to reform the presidential campaign system, Rep. David Price (N.C.) is spearheading the Democratic Party’s re-examination of its nominating process, including its “frontloading” of primaries and caucuses to reach an early conclusion in 2004.

Any changes in that process, including ones that might draw out the nomination battle through March and April, can’t be considered without taking into account their implications on fundraising in this current, skewed campaign funding process. The sooner Congress takes up the presidential funding system, the better. It really has to be addressed before 2007, or both parties might find they have a real mess on their hands, and candidates emerging not because they are the best ones to carry forward the party banner or move to the Oval Office, but because they can operate in — or more likely, outside — a funding system that is suited to a different era.

Norman Ornstein is a resident scholar at the American Enterprise Institute.

Recent Stories

Total eclipse of the Hart (and Russell buildings) — Congressional Hits and Misses

House plans to send Mayorkas impeachment articles to Senate on Tuesday

Harris sticks with Agriculture spending, Amodei likely to head DHS panel

Editor’s Note: What passes for normal in Congress

House approves surveillance authority reauthorization bill

White House rattles its saber with warnings to Iran, China about attacking US allies