Opting In or Out

Opting In or Out

As the first candidate to achieve a majority of delegates in the Democratic primaries for president and raise unparalleled amounts of money, Sen. Barack Obama–if he secures the Democratic presidential nomination in August–may soon face the question of whether he’ll accept public financing.

Since 1976, Republican and Democratic presidential nominees have accepted public financing for the general election, which comes from the $3 voluntary check-off on federal income tax returns. The money is distributed to party nominees as a federal grant of $20 million plus a cost-of-living adjustment against 1976 costs. The nominees are limited to spending only that money, which this year is set to be about $84.1 million per candidate.

“Since the public funding system has been in place no candidate has rejected public funding for the general election,” says Michael Malbin, founder and the executive director of the Campaign Finance Institute.

In February 2007, soon after he first announced his candidacy, Obama asked the Federal Election Commission if a “presidential candidate may solicit and receive private contributions for the general election while retaining the option of refunding the contributions and receiving public funds for the general election if he receives his party’s nomination.” The FEC said a candidate could take that option. In response to a questionnaire issued by the Midwest Democracy Network in September 2007, Obama indicated that if the Republican nominee accepted public funding, then he also would be willing to do the same. Some saw his actions and statements as evidence of his intent to use public funds.

Since then, Sen. John McCain, the presumptive Republican nominee, committed to accepting public funds for the election and also refunded contributions that had been made to his general election fund in the amount of $3 million. Obama has stated that since he is not the Democratic nominee, it is too soon to commit to public funding.

Although Sen. Hillary Clinton’s fundraising hasn’t matched Obama’s, she has raised more than McCain and more than most other presidential candidates in prior years during the primary. Additionally, she never gave any intentions that she would opt-in. “I think she will definitely opt-out,” says Amy Kauffman, senior fellow at the Hudson Institute, a nonpartisan public policy organization. “She knows that she would be able to raise far more money on her own and her best chance is always to overcome her opponent with more money.” Nevertheless, her campaign is carrying about $19 million of debt in the primaries.
“It would be unprecedented if one or both of the candidates decided not to take the public grant,” says Kenneth Doyle, senior editor of BNA Money & Politics Report.

If Obama and McCain accept public funding, they won’t be allowed to raise any more money for their campaigns and Obama will also have to refund money he raised for the general election. Both candidates will be able to raise funds for their national parties but they are prohibited from coordinating with those parties on how the money should be spent.

“Barack Obama could probably raise three times the amount