Small Donors Matter More Than Outdated Laws

Last winter, in the early stages of his run for the presidency, Barack Obama said he'd consider accepting public financing for the general election if his Republican opponent would do the same and agree to a set of ground rules, including limiting spending by party committees and outside 527 political advocacy groups.

That statement by Obama came before he assembled the most impressive fundraising juggernaut in modern political history, thanks in large part to an explosion of small donors giving over the internet. If Obama accepted public financing in the general, he'd have $85 million to spend between the end of his party's convention in late August and November 4. Obama realized he could raise far more than that for the late stages of his campaign and do so in a generally honorable way. (John McCain, in turn, refused to limit spending by the RNC or referee 527 groups active on his behalf). So today his campaign announced it would opt out of public financing in the general. As the great economist John Maynard Keynes once said, when accused of inconsistency: "When the facts change, I change my mind -- what do you do, sir?"

The facts changed for Obama. "It's not an easy decision, and especially because I support a robust system of public financing of elections," Obama said in a message to supporters today. "But the public financing of presidential elections as it exists today is broken, and we face opponents who've become masters at gaming this broken system."

McCain predictably slammed Obama's decision, in a calculated attempt to reaffirm his lapsed reformist credentials. Yet McCain's the one who's violating both the spirit--and perhaps the letter--of existing campaign-finance laws, as my colleague John Nichols noted, by opting in and then out of public financing when it was politically expedient.

Obama's army of small donors, building on the grassroots movement pioneered by Howard Dean in 2003-2004, represents a far more compelling challenge to the status quo than anything McCain is proposing. According to the Campaign Finance Institute, nearly early half of the $263 million the Obama campaign raised as of April came in donations of $200 or less. Only 34 percent came from donors giving $1,000--not an insignificant sum, but not an overwhelming number, either. Obama has almost three times as many small donors as McCain.

Sxity-three percent of McCain donors gave $1,000 or more. Only 23 percent of the $100 million McCain raised as of April came from donors giving $200 or less. While Obama built a campaign for the 21st century, McCain is still wrapped in conventional politics, raising big donations from the usual assortment of wealthy donors and big business.

Of course, small donations alone don't alleviate the need to fundamentally change how elections are run or financed in this country. Senators Susan Collins and Russ Feingold have sponsored legislation to modernize and update the current presidential public financing system, while Senators Dick Durbin and Arlen Specter have introduced a bill to publicly finance Congressional campaigns. Obama is an original cosponsor of both Feingold-Collins and Durbin-Specter. McCain has declined to sponsor either.

The campaign finance reform community recognizes these changing realities, but some leaders still remain wedded to the days of old. Fred Wertheimer of Democracy 21, one of McCain's closest allies in the campaign-finance movement, said he was "very disappointed" in Obama's decision. Public Citizen also proclaimed itself "deeply disappointed." Both Wertheimer and Public Citizen President Joan Claybrook helped to create the post-Watergate system of public financing, so they are naturally reticent at watching it die.

Other groups accept that the current system of public financing, in the words of Common Cause President Bob Edgar, "is badly outdated and in need of a major overhaul." They hope Obama, based on his past and future commitments, will be the one to change that. As one campaign-finance reformer told me, "holding Obama accountable for not opting into a broken system isn't really fair. We want the best reformer to win, not the candidate with a hand tied behind their back."

Comments (11)

1. Mr Berman, your article's opening paragraph blatantly misrepresents Obama's November pledge to accept public financing, which was cleary offered and has now cleary been broken. His questionnaire affirmation, and the extended essay he attached, was obviously intended to display a principled stand. He even pointed out John McCain's early acceptance of an Obama proposal to run only on public funds in the general, and to return excess contributions! Presumably he did this to shame the other uncommitted candidates on both sides. It was a lofty idea, so typical of him.

   Shame, where is thy blush? Today, with a volley of false justifications, Obama broke his written promise, and he did so for obvious financial and political advantage. Where the money comes from and what use he makes of it is not really the issue here.

   What's at issue now is every other promise he has made or will make. If you support Obama, you should ask yourself what you have come to expect from him, and whether he will really deliver when doing the right thing is not easy.

   Posted by man00ver at 06/19/2008 @ 10:05pm

2. I like the way Obama keeps one foot solidly resting on the cornerstone of democratic principle... and I wholeheartedly support his decision to continue going directly to the people for his campaign financing. The economic incentive reinforces his message... and the call to change is more easily corroborated by continual analysis and review of the demographics of the donations.

   The public campaign funding problems are best repaired between elections... when they can be dispassionately reviewed and corrected.

   Posted by ttr at 06/19/2008 @ 10:12pm

3. Don't fool yourself, ttr. If you do the math using the numbers in Berman's article, you'll find that Obama has raised more money from big donors than McCain has. Where is his other foot planted in your scenario...in a pile of money, or maybe in his mouth?

   Just what do you think is the problem with public campaign financing? Both candidates would have an equal amount of money from We The People. Obama has more support from 527s than McCain does, after all.

   Just how risky would it have been for him to keep his word, and why? Is he really the better person in the race?

   Posted by man00ver at 06/19/2008 @ 10:54pm

4. Don't fool yourself, ttr.

   ---I don't... That's what you're here for...

   If you do the math using the numbers in Berman's article, you'll find that Obama has raised more money from big donors than McCain has.

   ---Obama has raised much more money... period.

   Where is his other foot planted in your scenario...in a pile of money, or maybe in his mouth?

   ---His other foot is rooted in the 'American dream'... while making the obvious assertion that it can be a much pleasanter one for all of us.

   Just what do you think is the problem with public campaign financing?

   ---It diminishes significantly from accountability to the voter base.

   Both candidates would have an equal amount of money from We The People. Obama has more support from 527s than McCain does, after all.

   ---True enough...

   Just how risky would it have been for him to keep his word, and why?

   ---He is keeping his word... to his supporters... because he is remaining beholden to them.

   Is he really the better person in the race?

   ---Two great men... Obama is more 'in touch' with the will of the people.

   Posted by ttr at 06/19/2008 @ 11:22pm

5. Money, money, who's got money, who gets the money.

   All this talk hides the real issue. The USSC has decided that in the US money has a right of free speech. So most of the money goes on TV ... into the coffers of the owners Viacom, GE, News Corp, Disney ... about a billion this year.

   Whereas, in every other OECD nation, political advertising on TV is strictly limited or forbidden, thereby making it rather less likely that the candidates have to sell out to the moneyed interests.

   The voters retain their power, indeed enhance it, simply by voting. Activists work for their parties. The big money certainly doesn't disappear, but has a more difficult time buying the political process.

   Posted by sloper at 06/19/2008 @ 11:34pm

6. ttr, you make an interesting point about how private money can influence a politician. Some of us don't necessarily think that's a good thing. It's hard to see the distinction you draw between what you call "accountable to the voter base/beholden to his supporters" and what I might call "bought and paid for." At best, it's a slippery slope.

   Speaking of slope, sloper makes a pretty good point. Anything that levels the playing field is good, particularly in the general election. We all deserve an equal and direct examination of these candidates.

   Posted by man00ver at 06/20/2008 @ 01:30am

7. The best way to deal with the monster of political ads without banning them would be to require something like the Surgeon General's warning on cigarette boxes. Require each ad to display legibly the number of people who endorse it seriously enough to contribute money to sponsor it. Whether Barack Obama or John McCain endorses a political ad should not matter quite as much as whether a large number or a small number of people do.

   With this reform in place, a popular ad paid for by a large number of small donations would be able to display a big number in its "popular support" box. An pseudo-popular ad paid for by a small number of big donations would have to display a small number.

   The number of sponsors that a political ad could claim would have to be carefully verified by means of signatures. I would demand stricter standards of verification for campaign contributions than for votes. This would help insure that voting with ballots really would matter more than voting with wallets (and I agree with both "Manoover" and "Sloper" that it should).

   Since this reform would be content-neutral, it would avoid the difficult question of what is or is not "political," what is or is not "advocacy," and so on, thereby also paying all due respect to the First Amendment.

   I would also favor public campaign financing - distributed in proportion to the votes that each party received in the previous election - and would impose a tougher limit on the amount that any individual can contribute to any campaign. This reform is also content-neutral and would also help to make ballots more powerful than wallets.

   The problem is not "the amount of money spent on campaigns." The problem is that too few people give too much money - to both major parties - which skews their policies inevitably in a plutocratic direction. This is the problem that campaign finance reformers should recognize and should attack head-on.

   Posted by JakobFabian at 06/20/2008 @ 08:13am

8. by man00ver ...

   --It's hard to see the distinction you draw between what you call "accountable to the voter base/beholden to his supporters" and what I might call "bought and paid for." --

   I'd say that it will be a blessing and an empowering moment... when the conglomeration of the American people bought and paid for elected officials that actually represent them.

   Though it's easy to feel like money has taken over the electoral process... well, because it has... it is not wise to confuse money filtered through the corporate MSM backed machine with individual donations.

   By definition, corporations have different needs and ambitions than people... and our electoral process should take this into account... as sloper well noted.

   Posted by ttr at 06/20/2008 @ 10:49am

9. Wouldn't it be great if all elections were publicly funded and there would be no monied interest that had more influence over any other monied interest. That's a pipe dream. Especially when it comes to just how vast and big these general election campaigns have become.

   I am a little uneasy about Mr. Obama forgoing public funds for the general, but then I just think back only four years ago. What was the big story to come out of that general election...not Ohio...not voter disenfranchisement...it was the Swiftboating of John Kerry. No other story proved more tantalizing to the media than the Swift Boat campaign against the honorable service of John Kerry in Vietnam. Mr. Obama knows this. His staff knows this. And more importantly, Republican 527 groups know this.

   Bottom line is, Barack is right...the system is broken. Attempting to fix it in an election year would invite more corruption. As long is the option is available to opt out, I don't see anything wrong with his decision, even after an earlier promise. I don't want the next 527 attack campaign to be added to the lexicon. And I want a Democrat to win the White House.

   Posted by ruzickmr at 06/20/2008 @ 11:09am

10. Requiring free air time for candidates would lower the cost of running for office and make public financing more plausible. The air ways do indeed belong to the public, not the station owners, requiring this makes practical sense. You won't see the ownership classes going for this as it gores their cash cow. I say take away their licenses if need be to force compliance. Financing by the public rather than financing by lobbyists and corporations is how to change this. First you take away the power of the purse to influence.

    Posted by pribfam at 06/21/2008 @ 8:57pm

11. Thanks, "Pribfam," for mentioning the contribution that our media could make to make our political campaigns less expensive. Yes, the broadcast media and the Internet have an obligation to serve the public interest. We just need a radically different FCC and a greatly improved Congress to compel the media to shoulder their obligation.

    In this regard, "Ruzickmr" has a point. So does Ari Berman, whose data show that Obama's campaign chest is supplied by more small donors and fewer big ones than McCain.

    However, I note that EVERY politician boasts that most of his or her campaign contributors are "small," and the economic differences between the donors of the two campaigns, which Berman has taken pains to present to us, are easy to obscure. It's just too easy for all politicians, regardless of their ideology, to use the contributions of big donors to buy ads with which they can brag about how much of their money comes from small donors.

    The way the game of politics is played has a built-in plutocratic bias. We should not expect every Democrat to be able to succeed like Obama just because there's an Internet. This works only for politicians with superstar charisma, and frankly, that shouldn't be necessary. There are some decent candidates who will never have the charisma of Barack Obama, but they shouldn't need it to have a fair chance to beat the representatives of wealth.

    Posted by JakobFabian at 06/21/2008 @ 11:06pm