What's Next For Campaign Finance?

Both Barack Obama and John McCain have dealt blows to the presidential public campaign financing system -- John McCain by opting in, then opting out of nomination funds and Obama by rejecting public funds for the general election outright.

Thomas Mann, the W. Averell Harriman chair of Governance Studies at the Brooking Institution, has been an outspoken advocate of campaign finance reform for well over ten years. During the debate over McCain-Feingold in 2002, a bill that eliminated soft money, Mann frequently appeared in the media to offer comprehensive analysis of and justification for the proposed contribution limits and other fixes to the existing campaign finance structures. Over the last six years, Mann has continued to stand by contribution limits and other regulations. But now, as the Obama campaign continues to shatter assumptions about fundraising, Mann discusses how new efforts at reform might have to get creative, and whether public financing has a future.

Abby Rapoport: Now that soft money has been eliminated is the sheer amount of money spent something to be concerned about or is the steady growth in spending a sign of involvement?

Thomas Mann: I've never worried about the overall amount of money in campaigns. We're a huge country, a public not much engaged in politics or public affairs. It's hard to get through the din of advertising for commercial products. ... The problematics come with how it's raised and how it's spent, how it's allocated among candidates. But in this cycle, it seems to me that [the high amount of money came from] the high level of interest, the competitiveness between Clinton and Obama and basically the fact that the public financing system fell into disrepair.

It just wasn't credible in the nominating process, because the spending limits were just crazy. I mean think about it, Clinton and Obama and McCain, others would have been limited to a little over 40 million dollars in spending. Clinton and Obama each raised over 250 million dollars so far, and there's still a couple months to go.

AR: You were very involved in the passage of McCain-Feingold back in 2002. That bill tried to close off loopholes in an existing campaign finance system. Do you think there are more loopholes that have exposed themselves this cycle?

TM: My inclination is not to go back in and say what can we regulate now? Mine is to say, let's acknowledge two big things happening. One, the courts have made it absolutely clear that parties, political parties, can spend as much as they want as long as they do it independently, on behalf of their candidates. Which means there's no way now that you can control spending. That's an important point to keep in mind. The second one is that we've seen just the first evidence of the possibility of a very different source of funding for campaigns -- namely small donors.

And therefore my inclination is to acknowledge the first and therefore don't get confused about what public financing can or cannot do. Rethink public financing in light of what parties can do independently and secondly begin to think creatively about building the small donor base for campaigns, not just at the presidential level, but the congressional level, state legislative level. See what it takes, maybe new public policies for tax credits, for matching funds. But I'm more inclined to think less in a regulatory restrictive way, than saying, "Hey, a new dimension is opening, campaigns are changing, more people are entering as small donors. Are there ways we can build on that?"

AR: Do you feel like you've switched, over time from a more regulatory position? Or did the dynamic in campaigns change?

TM: I try to keep myself open to new information. I began in this field as a traditional political scientist that was skeptical of the reformers, that argued that money will find its outlet, that generally believed there were limits to what you could accomplish in terms of restricting money. Then as a I did research and I viewed the real world and saw what was happening out there, I came to embrace some ways of getting existing law to work where it had been undermined, and that's what the whole McCain-Feingold thing was about. But I was never a champion of spending limits for their own sake, I always believed contribution limits ought to constantly be increased to reflect the cost of campaigning. So now I see new opportunities presenting themselves by changes in technology and I see new limits in place from the courts that you've got to reckon with. So that leads me to look into some other ways to grapple with campaign finance.

AR: Many have called Obama's decision to forgo public funds the deathblow to the public financing system. You wrote back in April that the system had been "largely irrelevant" in the nominating cycle. Should legislators work to fix the existing public financing system or should they get rid of it?

TM: It's sad. It has for the most part died in the nominations phase. It began with Bush opting out and winning the election in 2000. Followed by Bush, Dean and Kerry in 2004. So as we approached 2008, it was clear any really serious candidate was going to opt out and raise as much money as he or she could. Now I think that's unfortunate. There is something to be said for having some seed money, some opportunity for lesser known candidates to raise some amount of money, to have it matched in some way, so the field of candidates is not limited to those who can either self finance or who have access to huge amounts. I continue to believe it's important to update that system. It needs much more generous matches but I guess I'm open to the possibility that we disconnect it from spending limits. Because I think almost any kind of spending limits will lead the major candidates to opt out.

I'm beginning to think we may want to refashion that program as a matching system for small contributions, up to a certain limit of public matches that would effectively make it easier for lesser known candidates to get enough money at the outset to keep a campaign alive at least through Iowa and New Hampshire. The way it is now, many drop out a year before.

AR: What about in the general election?

TM: As far as the general election is concerned, there it's a real dilemma. The fact that Obama is opting out does not mean that he will naturally have more spent on his campaign than McCain. With party independent spending, the public financing only becomes only a part of the expenditures, and a small part. I mean you could have argued it made sense for him to take the public grant, the 84 million dollars, but raise money like crazy between now and the end of the democratic convention, raise two, three four hundred million dollars, transfer it to the party, and then let the party spend it independently on behalf of his campaign. Now he didn't do that because he wants to run his own campaign. He wants to control the message control where the playing field is, and make those decisions so there's a consistent message.

We set it up to be full public financing and for a number of years that's just how it worked. It stopped working that way in 1996 with soft money. Now soft money was eliminated but the court sort of reinforced its view that even for candidates that accept public funding, their party can then spend independently all they want and the candidate can help them raise that money at the beginning. So that leads me to question the structure of public financing in the general election. Maybe it should be a floor that's made available to candidates but doesn't limit other money they can raise and spend on behalf. But why are we doing that? I mean the public may not be real thrilled about that if they're ponying up these public dollars but it doesn't limit the overall amount or what's involved in raising the other amount. So I'm puzzled. I'm not sure what to do about the public financing system in the general election.

AR: Is there a future for public financing at other levels, like congressional and state races?

TM: I've long supported public financing at all levels of government but I think the courts interpreting the constitution have put up real obstacles to systems as we once defined them as full public financing. I'm now inclined to look for other ways of using public subsidies to enrich to resources available to candidates, to foster greater competition, to try to reduce the money chase. To see if we can't build on new forms of campaigning that might reduce the cost of campaigns.

I just feel that campaigns are not the same as they were forty years ago when the current structures were put in place. And we need to acknowledge that, to see the changes that are coming and to try think creatively about how to manage this.

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