Obama’s Public Funding Opt-Out

CQ Politics addresses the questions concerning the state of public funding within the context of Obama’s decision.

1. How does the presidential public financing system work?

There are separate public financing systems for the primary and general presidential elections. Both are optional, and a candidate is free to participate in one or the other, or both, depending on qualifications.

The general election financing program covers the period of time between the candidate’s official nomination at the party convention and election day in November. The presidential nominee for each major party is automatically eligible for public funding. Minor party candidates may also qualify for partial funding, determined by their party’s vote totals in the preceding presidential election. If he or she chooses to participate, the candidate receives a grant adjusted for inflation. For 2008, that amount is approximately $84.1 million. The candidate may not raise or spend any additional funds, except to cover legal and accounting expenses.

2. Why did Obama decide to opt out of the public financing system?

Obama said he made the decision because “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.” But the bottom line is the campaign does not want to stop raising and spending its own money. The soon-to-be Democratic nominee has already shown the capacity to raise much more than $84 million over the same roughly two-month period that would be covered in the general election campaign. He raised $56.8 million in February, alone. Given his fundraising abilities, and considering Sen. John McCain ’s own funding struggles, Obama is likely to have a huge advantage over his Republican rival by the time the conventions roll around. Taking public funding would neutralize that.

In making the decision, the Obama campaign no doubt weighed the fact that the Republican National Committee presently has a significant cash advantage over the Democratic National Committee – $40.6 million to $4.4 million at the end of April — putting the Republican party in a position to outspend the Democrats on presidential race.

The parties and other outside interest groups can spend unlimited amounts to influence the election. In 2004, the spending totalled more than $200 million.

Some say it is hypocritical of Obama to have went back on his early statement...he is a politician. If I were advising Obama I would counter this argument by stating, "our campaign is a grass roots network of donors and volunteers. The average donation is less than $100...coming from hard working Americans...the backbone of our great democracy. We are not following the McCain strategy of tapping lobbyists and corporate giants as if they were offshore oil wells."