Sunday, February 11, 2007

Public Financing System Cap Raise

Just in 2004, George W. Bush was the only candidate (correct that if it’s wrong) that decided not to use the public financing system. In the upcoming presidential race, Mrs. Clinton has already decided to opt out of the system. Most candidates are expected to follow. This outdated system needs to be updated.

Under the current system, candidates must limit total campaign spending of private of private and public funds for all primary elections to about $45 million if they choose to follow the system. The federal government will match up to $250 of an individual’s total contributions to an eligible candidate, up to a maximum of roughly $19 million. In the general election, a campaign may become eligible for of $74 million, as long as the campaign agrees to not accept private contributions.


Most serious contenders this election plan to raise $100,000,000 for the primary, well above the $45,000,000 the Public Financing System allows. Something has to be changed.

There is no question that the $45 million limit must be raised. The question is how much. Many candidates plan to raise $100 million. To be wooed, they need more. In a new law, $125,000,000 should the spending limit for presidential candidates.

As seen with the existing arrangement, the success of a set limit degrades over time. A new limit will have to be dynamic. One possible option is a percent increase over time. Every four years, the limit raises four percent. This is a simple, effective solution. A more precise solution could be a limit based on the Consumer Price Index (CPI). Starting at $125 million, the cap would vary based on inflation. While more complicated, this takes in account the strength of the dollar.

Either option, one thing has to be recognized: to stop corruption and special interest groups, the cap on fundraising in the Public Financing System has to be changed.