Jay Mandle of Democracy Matters uses the most recent installment of his "Money on my Mind" column to address deficiencies -- namely a lack of funding -- in the current presidential public financing system, and the corresponding rise in private money domination.
As the presidential public financing program has been underfunded, and participation in it has meant endangering one's ability to remain a competitive candidate, the need to overhaul the system on a Clean Elections model has become more apparent:
Hillary Clinton, Barack Obama, Mitt Romney and Rudy Guiliani are raising and spending far more money than would be the case if they participated in the public funding system. The FEC website does indicate that if primary elections had been held in 2007 each candidate would have been limited to about $41 million. That figure will be adjusted upward in 2008, but the order of magnitude will be about the same.
The leading candidates have already exceeded those spending limits. Clinton ($91 million) and Obama ($80 million) have dwarfed them. And though the Republicans have not been able to raise as much, both Romney ($63 million) and Guiliani ($47 million) have also exceeded the amount they would have received from the public funding system.2
One thing is clear. If we want our presidential nominees to be independent of private interests, the public funding system will have to be increased. Otherwise politicians who wish to be free from dependence on special interests will continue to be at a funding disadvantage.
Without a healthy public financing alternative, candidates are forced to rely on big money contributors -- with big gains at stake:
The third pattern is the remarkable similarity in the importance of the financial sector in funding all four of the leading candidates. This sector alone contributed slightly more than 20 percent of the money collected by Clinton and Obama. For Romney and Guiliani, contributions from this source came to almost one-third of their respective totals, and in both cases it was the leading fund-raising category.
The role of the financial sector in political fund-raising deserves special mention because of the crisis that is currently threatening the economy. What happened to cause this crisis was that mortgage lenders found ways to induce borrowers to take loans whose costs were beyond their means to repay. At the same time those lenders took advantage of a regulator failure by the Federal Reserve and devised techniques to evade exposure to those bad loans. As defaults mounted, new loans of any kind became more difficult to obtain. With that the case, economic activity has been impeded, threatening the country with a recession.
Obviously in the near future the loopholes that allowed all of this to occur will be the subject of intense public debate and proposed remedial legislation. But by making contributions to all of the leading candidates, it is quite clear that the financial community is preparing for this moment of truth. It seeks to ensure that they will have access and the ability to influence who ever enters the White House in January 2009.