Presidential Funding and McCain-Feingold

Yesterday, I posted this item on the presidential public financing program that will likely be bypassed by the leading candidates in the 2008 election. Much hand wringing seems to be going on related to the move by Hilary Clinton to start raising funds for the general election now, despite not having won the Democratic primary. One question that seems to be bouncing around is why McCain-Feingold didn't address the issue. One theory is that the law's authors simply overlooked or ignored the precarious position of the presidential funding program.

In reality, the decision not to reform the public funding program for presidential election boiled down to simple legislative politics. Brian Svoboda, an attorney with the law firm PerkinsCoie and former Senate staffer who worked on the bill, posted these comments on the Election Law listserve (reprinted with permission):

In the early 1990s, serious proposals to amend the FECA tended to be offered by Democrats; they tended also to involve expansion of the public financing system. To pass reform legislation after 1994, though, you needed Republican votes. To get those votes, you needed to stay away from public financing. When I was a Senate legislative aide to one of McCain-Feingold's Democratic co-sponsors in 1997, when the bill was being revised toward the form that would become law five years later, it was understood by all that there was no room for anything in the bill that would address public financing. That would have been anathema to the Republicans whose votes were needed for cloture ... and, as I recall, to Senator McCain.

This was the first of two big decisions that placed McCain-Feingold on a collision course with the presidential public financing system. The second, made on the floor in 2001, was to increase the hard money contribution limits without changing the presidential public funding system. Here, too, the calculus was entirely political: how do you help pick up the votes of the Republicans you need for cloture, while creating additional inducements for Senators on both sides of the aisle to vote for the bill? The result was that public funds would provide a diminished -- and, because the new limits were adjusted for inflation, a perpetually diminishing -- share of the resources available for presidential campaigns, and thus a less effective inducement to limit private spending.

I think it's a mistake to view this as an unintended consequence of McCain-Feingold. It was entirely intended, even if its implications were not fully considered. As the bill's proponents would presumably tell you, it was a product of the political conditions that existed in Congress after 1994, and of the parameters that existed back then for passing legislation. One can reasonably argue that McCain-Feingold simply hastened the doom of the public financing system, instead of sealing it. One also can argue about whether an entirely privately funded system was a worthy price to pay for restrictions on party and officeholder soft money activity.

So politics drove the decision not to reform the system.

But let us assume that the political situation was different and reform was included. We are still left with two facts--1) the cost of campaigning has gone up-significantly, since the creation of the program; and 2) fewer Americans are checking the box on their tax forms, leading to fewer resources to be given to candidates. Craig Dunkerly commented on my original post:

There are at least two glaring deficiencies in the current law. One is that the dollar amounts provided to candidates who forgo private special interest donations were not indexed for inflation and are no longer realistic given the current costs of campaigns.

The second is that unlike most successful public financing systems currently operating in 28 states, there is no "matching funds provision." These provisions provide addition matching funds to publicly funded candidates if they are outspent by privately funded candidates or attacked by independent expenditure groups. This helps keep the playing field level.

Mr. Dunkerly is correct, the dollar amounts provided in the public funding program are small but I point to fact number 2 above, we cannot increase the amount given to candidates within the current funding mechanism. So unless additional general treasury funds are added to the check off fund, there will not be enough money to fund a campaign as expensive as a presidential campaign, let alone any congressional or senatorial contests, which is the ultimate goal of public funding proponents.

Mr. Dunkerly also notes that 28 states (and I will accept his count although I am pretty sure it is an overstatement) have a public funding mechanism. But those states, assuming the count is accurate, are not the big states, with the most expensive media markets. New York, California, Florida, Texas and Illinois do not have a public funding program on a statewide scale. Which brings us back to fact 1 from above--the cost of campaigning has outstripped the reach of a public system. Were a public funding system put in place one of two things would happen--the cost of campaigning would continue to skyrocket since there is essentially no market mechanism--that is the difficulty of raising funds for a campaign, to check the costs of the media market. This would of course lead to the demand for greater public funding, continuing the spiral. The second scenario would lead to getting the Federal Communications Commission involved in setting prices for political advertising. Advertising costs on TV and radio are driven by market forces and if the FCC starts altering that, the blow back from the radio and TV community is likely to result in a regulatory war that we would just as soon avoid.

But even assuming the presidential funding system can be effectively reformed, we are left with the question of whether it should be reformed. How a campaign is funded is not the pivotal question in our electoral system, but rather whether or not the candidates we are presented with should be entrusted with the office they seek. A fully funded candidate with a bad message, bad leadership skills and bad policies will not win and will even lose to candidates with less money but more appeal to voters.

In the end, even though money matters in elections, on election day the only thing that matters is the voters and their beliefs and thoughts--not the beliefs and thoughts of the moneymen.