The Death of Public Campaign Financing

Updated at 7:17 a.m. on January 31.

On the eve of a presidential election that may cost President Obama alone more than $1 billion in private money, it's time to ask: Who killed public financing?

House Republicans appeared to kill it last week when they voted 239-160 to defund the presidential public-financing system in a bid to save the Treasury an estimated $617 million over 10 years. Said the repeal bill's author, Rep. Tom Cole, R-Okla., on the House floor, "Right now, this is money we can't afford to waste, and this is a system that's broken."

SOTU_bug.gif In truth, though, last week's House vote was largely symbolic. Cole's bill appears to be going nowhere in the Senate, and Obama would probably veto a successful repeal in any case.

Speaking of Obama, might he shoulder the blame for public financing's demise? He was, after all, the first presidential candidate to reject public funding in a general election, and the $745 million in private cash that he raised in 2008 makes the Treasury's public grant look pretty paltry by comparison.

Obama also failed to make good on his campaign promise to fix the presidential system, which was the crown jewel of the post-Watergate reforms of the 1970s. Now that Republicans run the House and Democrats barely control the Senate, it's likely the president's missed his chance.

But Obama forcefully defended public financing on the eve of the House vote last week, warning in a statement that killing the system would "expand the power of corporations and special interests" and narrow the field of candidates. Reform advocates who've resisted criticizing the White House were all smiles.

Taxpayers might be the real culprits here. The percentage of taxpayers who've checked the box on their returns that directs $3 to the Treasury to fund presidential campaigns at no cost to themselves dwindled to a mere 7.3 percent in 2009. Even at its high-water mark in 1980, taxpayer support for public financing was only 28.7 percent. Sen. Mitch McConnell, R-Ky., who has introduced a companion repeal bill in the Senate, called the taxpayer checkoff "perhaps the largest poll taken in the country every year."

Even this anemic show of support doesn't say too much, however, given how few taxpayers even notice the checkoff box. Until a few years ago, the leading tax-preparation software systems automatically defaulted to a "no" on the checkoff. As Fred Wertheimer, president of the nonprofit group Democracy 21, wrote to House members last week, the real solution for that is a public-education campaign.

Voters have certainly played a part in public financing's decline. Though 16 states, including Arizona, Connecticut, and Maine, offer full or partial public funding to political candidates, several states or municipalities have rejected public financing in recent years. These include Portland, Ore., where voters narrowly opted to repeal that city's system of public funding for candidates. California has turned back public-financing proposals, both on the ballot and in the Legislature, three times since 2000. And more than 50 percent of voting Floridians said "yes" to an amendment to repeal that state's public-funding system in November, but it was short of the 60 percent supermajority required to change the state Constitution.

Of course, public financing isn't dead yet. The next crop of presidential candidates, including a diverse crew of GOP hopefuls in 2012, may yet launch their campaigns with Treasury funds. But even if public financing lives to see another election, the Supreme Court may be poised to finish it off once and for all. The high court has agreed to take up a challenge to a portion of Arizona's public-financing system, which gives extra money to candidates who face wealthy, self-financed opponents. Given this Court's antipathy toward election regulations, that challenge could spell doom for public financing.

With so many wounds to the system and enough suspects for an Agatha Christie whodunit, one might expect reform advocates to be in deep mourning. But here's another mystery: Even with public financing gasping on the floor, reform advocates are surprisingly chipper.

The reason? The open assault on campaign-finance regulations by the Supreme Court and GOP lawmakers has fueled grassroots enthusiasm for reforms--including public financing. Democrats on Capitol Hill have introduced legislation to both revamp the presidential system and extend public financing to congressional candidates. And even as some states have soured on public financing, others, such as New York, may be poised to embrace it.

"There are some places where progress is going to be made, even as we're fighting defensive battles in other states," said Nick Nyhart, president and CEO of the group Public Campaign.

As Nyhart sees it, the very threat to existing regulations presents an opening. The down economy has intensified public anger at corporations and special interests, which reaches across party lines. Lawmakers themselves are fed up with the system, which forces them to spend increasing amounts of time raising money.

Finally, the worse things get, from Nyhart's perspective, the easier it becomes to convince folks of the need for dramatic change. As he put it: "Unless you do something to solve this problem, it's only getting bigger."

So who killed public financing?

The very people who may bring it back to life.

This article appeared in the Monday, January 31, 2011 edition of National Journal.