|Presidential Campaign Finance||FEC
Center for Responsive Politics: Race for the White House
Campaign Finance Institute
Public Citizen: White House for Sale
|Total Cost of 2008
Presidential Campaign: About $2.4
Presidential campaigns are expensive, but none was more expensive than the 2008 campaign. The Center for Responsive Politics estimated the cost of the 2008 presidential race at $2.4 billion, and reported that fundraising by the presidential candidates was double that of 2004. (>) By comparison, the Center put total spending on the 2004 presidential election at $1.2 billion while noting that "this figure includes a very conservative estimate of spending by advocacy groups." (>) The Obama campaign shattered fundraising records raising a total of $744.9 million. During the primaries its biggest month was March 2008 when it brought in $55.4 million; it far surpassed that in the general election, raising over $150 million in September 2008. This record fundraising gave the Obama campaign a substantial advantage over first Hillary Clinton as the primaries stretched on and then John McCain in the general election.
An Irrelevant System
In the aftermath of Watergate, Congress passed the Federal Election Campaign Act, instituting a system of partial public financing for presidential primary candidates and full public financing for general election candidates. Candidates who qualify and agree to abide by certain restrictions receive payments from U.S. Treasury. The federal payments come out of the Presidential Election Campaign Fund, which is filled by the check-off on federal income tax forms. (For the record, in 2008 the Fund distributed a total of $139.4 million: $21.7 million in matching funds to eight primary candidates, $33.6 million for the two major party conventions, and $84.1 million to the McCain-Palin campaign; this compares to a total of $207.5 million distributed in 2004).
As one might expect, over a period of more than thirty years problems have emerged. The Federal Election Commission, although one of the most public-friendly agencies in Washington, is by design rather ineffective; typically by the time it has finished investigating a matter the campaign will have long since ended. In 1996 the campaign finance system experienced a catastrophic failure. Laws were bent, if not broken, and stories about White House coffees, Lincoln bedroom sleepovers, and Chinese money filled the headlines through much of 1997.
Large soft money contributions to the political parties drew particular criticism. After years of work campaign finance reform advocates achieved a major victory on March 20, 2002 when the Senate passed the Bipartisan Campaign Reform Act of 2002 (BCRA, also known as McCain-Feingold) in a 60 to 40 vote. President Bush quietly signed the measure into law (Public Law No. 107-155) on March 27, 2002; it took effect on Nov. 6, 2002. There were concerns that cutting off the flow of soft money to the parties would harm those institutions, but the parties adapted to the new environment. Further, the large soft money contributions quickly found a new channel in the so called "Section 527" political organizations. (527 page) The constitutionality of BCRA was challenged in the U.S. Supreme Court and legal wrangling continues to this day. On Nov. 13, 2009, the RNC filed a lawsuit challenging several campaign finance restrictions imposed by BCRA. >
One small but
change brought about by BCRA was to raise the $1,000 limit on
contributions to $2,000 with indexing for inflation ($2,300 in the 2008
cycle). The $1,000 limit had not been adjusted for inflation
the law was enacted in 1974 and was worth about one-third of the
In a Feb.
9, 2005 letter FEC Chairman Scott E. Thomas and Vice Chairman
E. Toner called on Congress to review the presidential public funding
Congress does not act within the next two years, the system runs the
of being totally irrelevant in the 2008 election and beyond," the
federal income tax
is plagued by a low level of citizen participation -- in recent years
about 11 percent of filers have done the check off compared to 27.5
on 1976 returns. The check-off amount has been raised from the
original $1 to $3. But the problems with the public financing
system run deeper. In recent cycles leading primary
not wishing to be constrained by spending limits, have opted not to
primary matching funds. In 2008, for the first time
ever, one of the major party candidates chose not to receive the
general election grant.
Some possible fixes are contained in the report "So the Voters May Choose... Reviving the Presidential Matching Fund System" issued by the Campaign Finance Institute's Task Force on Financing Presidential Nominations on April 12, 2005. In July 2006 Sen. Russ Feingold (D-WI) and Reps. Marty Meehan (D-MA) and Christopher Shays (R-CT) introduced legislation to address the problems. However, their Presidential Funding Act of 2006 (S.3740/H.R.5905) did not advance in the 109th Congress. They reintroduced the bill, the Presidential Funding Act of 2007, but it would not have taken effect until 2009, that is for the 2012 campaign. This legislation would have made significant changes to the system of public funding, for example changing the primary match from 1:1 to 4:1, raising the spending limit for primary candidates from about $45 million to $150 million, and raising the income tax check-off from $3 to $10. (press release).
There have been
other proposals to reduce the influence of big donors in the nominating
The now inactive Unity08 promoted a "Clean Money Pledge" which citizens
only vote for a presidential candidate who has raised more than half of
his/her funds through small contributions of $250 or less."
Howard Dean campaign manager Joe
proposed a "$100 Revolution" to give grassroots Democrats a greater say
in the party's presidential nominating process. On March 11, 2005
he created a stir speaking at the Politics Online conference at the
Washington University when he threw out the idea of website that
will ask donors for their email address and a pledge of $100 towards
2008 Democratic presidential campaign. As Trippi envisaged it,
pledges would accumulate to a formidable sum that would go to the first
Democratic candidate who promised he or she will take only
of $100 or less.
On top of its inherent weakness, the FEC struggled along for almost the first half of 2008 with just two Commissioners due to a stalemate over one of President Bush's nominees. Not until June 24 did the U.S. Senate finally approve five Commissioners, bringing the FEC to its full complement of six.
After a candidate
by meeting the $100,000 threshold--raising $5000 in 20 states in
of $250 or less--his or her campaign becomes eligible to receive matching
funds. Contributions from individuals of up to $250 are
dollar for dollar with payments from the Presidential Election Campaign
Fund. Candidates began receiving payments in January 2004.
They must agree to comply with spending limits, based on the
figure of $10 million, adjusted for inflation (in 2008 the limit was $50,460,000; when costs associated with
fundraising were included it was
In the 2000
primary campaign then Gov. George W. Bush declined matching funds and
in more than $90 million in individual contributions, a record.
2004 President Bush again declined matching funds and there were
suggestions that he could raise upwards of $200 million although he
no credible Republican challenger. Faced with this prospect, two
of the Democratic candidates, former Gov. Howard Dean and Sen. John
Kerry, opted out of the public
system as well. In the 2008 cycle most of the major candidates
opted out of the matching funds program; of the top-tier candidates
only Edwards ultimately accepted matching funds while McCain, Romney,
Huckabee, Obama and Clinton did not participate. (McCain first
applied for matching funds, but later decided to opt out...press
Payments to eight candidates who did participate totaled about $21.7
million (Edwards $12.9 million, Tancredo $2.2 million, Biden $2.0
million, Dodd $2.0 million, Kucinich $1.1 million, and Nader, Hunter
and Gravel less than $1 million each).
In February 2007 the Obama campaign started soliciting funds for use not only in the primaries but in the general election as well. (see FEC draft Advisory Opinion). The campaign said, however, that if Obama did win the nomination it would adhere to public funding in the general election provided the Republican nominee did so as well; a position it later reversed. The prospect of campaigns declining to participate in general election public funding caused concern among reform groups (press release).
Early money is vital to a candidate's viability. During the year leading up to the election year, campaigns trumpet their fundraising successes. Candidates that do not fare well tended to be relegated to second-tier status.
All told through
June 30, 2008 twelve Republican candidates received a total of
$337.3 million in individual contributions. During the same
eight Democratic candidates reported $633.8 million in individual
contributions (see tables below; also this chart > shows different figures 11
and 8 Democrats: $622,701,933).
Taking into account other receipts, including transfers from
other committees, loans often from the candidate, federal matching
PAC contributions, total receipts in the pre-nomination period by just the campaign committees
over $1 billion as were total disbursements.
The major parties receive public funds to put on their national nominating conventions, based on the 1974 figure of $4 million, adjusted for inflation. In June 2007 the FEC certified the Democratic and Republican parties were each entitled to receive $16,356,000 in public funds to put on their 2008 national conventions, and sent letters to the Secretary of the Treasury requesting the payments be made. When inflation was factored in, the total amount came to $16,820,760. (Third parties whose presidential nominees received at least five percent of the vote in the previous election also could receive funds toward their conventions; none met this criterion for 2008). However the majority of convention funding comes from non-profit host committees which are formed to defray expenses connected with hosting conventions; these can accept direct and in-kind contributions from local businesses, unions and individuals. The Campaign Finance Institute has been sharply critical of the FEC's approach to the host committees, arguing that they create a "loophole for unlimited soft money contributions to the political parties.” (CFI report) The Denver 2008 Convention Host Committee raised $62.9 million (>) and the Minneapolis-St. Paul 2008 Host Committee raised $54.0 million (>). (CFI analysis) By comparison in the 2004 cycle, the Boston host committee raised $56.8 million and the New York host committee raised $85.7 million.
campaign's biggest month was September; on Oct. 19, 2008 it announced, "In the month of September, we raised over
$150 million and added 632,000 new donors for a total 3.1 million
donors to date."
Because the Obama campaign did not accept public financing, there is no requirement that its FEC reports be audited. However, on Oct. 5, 2008 the RNC announced it would file a complaint with the FEC seeking an investigation into "foreign national and excessive contributions accepted by the Obama campaign that demonstrate it is operating outside of federal campaign finance law." Campaigns are not required to disclose names of those who contribute less than $200, but once contributions total more than $200 disclosure is required. The cases of "Good Will" and "Doodad Pro" drew particular attention; each made dozens of contributions that added up to over $10,000. (McCain press release)
Much was made of the
small donations that fueled the Obama campaign. While those were
significant and the campaign clearly attracted people who had not
donated to campaigns before, a post-election analysis by the Campaign
found that repeat donors and large donors were equally important. (>)
Further, the watchdog group Public Citizen identified 606 bundlers for
the Obama campaign including 52
who raised a minimum of $500,000; the group showed 851 McCain bundlers
including 70 who raised at least $500,000.
Tables: Primary Finances
Note: These tables highlight some categories of receipts and does not break out others (contributions from political party and other political committees, offsets, other receipts such as dividends and interest). Final federal funds payments were higher: Edwards $12,882,877.42, Biden $2,033,471.83, Dodd $1,961,741.71, Kucinich $1,070,521.06, Gravel $215,966.74. (Jan. 2009 >)
Campaign Finance Institute (Task Force on Financing Presidential Nominations). "Participation, Competition, Engagement: Reviving And Improving Public Funding For Presidential Nomination Politics." Report issued on September 22, 2003; updated report issued on April 12, 2005.
Campaign Finance Institute (Steve Weissman and Ruth Hassan). “The $100 Million Exemption: Soft Money and the 2004 National Party Conventions.” Report issued on July 7, 2004.
Institute for Politics, Democracy & the Internet. March 13, 2006. "Small Donors and Online Giving: A Study of Donors to the 2004 Presidential Campaigns."
Texans for Public Justice. October 1, 2004. "Payola Pioneering: Exposing the Bush Pioneer/Ranger Network."
Democracy North Carolina. August 2003. "The Color of Presidential Money: North Carolina Case Study."
for Public Integrity's Buying of the President 2004
Michael J. Malbin, ed. March 2006. The Election After Reform: Money, Politics, and the Bipartisan Campaign Reform Act. Lanham, MD: Rowman & Littlefield Publishers, Inc.
|Copyright © 2003, 2004, 2005, 2006, 2007, 2008, 2009 Eric M. Appleman/Democracy in Action.||