Presidential contender Howard Dean and his aides are mulling over the idea of Dean switching his previous position to become the first Democratic candidate ever to opt out of the matching fund system that Congress enacted 30 years ago to limit campaign spending. If he won the presidential nomination, Dean could then spend freely, trying to keep pace with President Bush who, experts say, will raise $100 million or more before the GOP convention.
During the primary season, candidates can get taxpayer funds to match the money they collect from donors. Candidates are not required to accept matching funds, but if they do, they must abide by a spending limit.
In 2004, the primary season limit will be about $44 million.
Six months ago, Dean said he would make campaign spending an issue if any of his Democratic rivals went outside the taxpayer financing system.
“It will be a huge issue,” Dean told the Associated Press in March. “I think most Democrats believe in campaign finance reform.”
But a potentially crippling problem confronts next year’s Democratic nominee: Bush did not use matching funds in the 2000 GOP primaries and will not do so again next year.
Even though Bush almost certainly will have no primary opponent, his campaign is likely to collect and spend more than $100 million, perhaps as much as $200 million, raised in increments of no greater than $2,000, the maximum permitted for an individual donor under the McCain-Feingold campaign reform law that Bush signed into law two years ago.
A Democratic candidate, having locked up the nomination, may wind up in March with a pittance in his treasury. Bush and his team would then commence firing TV ads designed to beat the Democratic candidate to a pulp.
In the 2000 campaign, this didn’t happen because the Democrats were able to use unlimited “soft money” gifts from wealthy individuals and labor unions to pay for ads and other efforts to keep Al Gore competitive with Bush during the period before the parties’ national conventions.
But the McCain-Feingold law banned national parties from using soft money in campaigns for federal office. In the 2000 race, soft money represented about a third of Republican fund-raising, but nearly half of Democratic fund-raising.
A Democrat who clinched the party’s nomination in March would face “a campaign finance desert” between that point and the convention in July, said Larry Noble, the former general counsel of the Federal Election Commission who is now head of the non-partisan Center for Responsive Politics, a Washington research group that tracks campaign spending.
Dean had phenomenal success in raising money in the second quarter of this year: $7.6 million, nearly $2 million more than the next-best fund-raiser, Massachusetts Sen. John Kerry, collected in the quarter.
And for the third quarter, some of Dean’s rivals are predicting he will collect $15 million.
If Dean can keep increasing his revenue growth between now and next July he’d have enough money to fight on competitive terms with Bush.
RICH VEIN OF DONORS
And by avoiding the spending limit, Dean could also tap a rich vein of donors who had supported other Democratic contenders.
A person who had written a $2,000 check to the campaign of Massachusetts Sen. John Kerry in July could also write one to Dean next April if Dean were the presumptive nominee.
But dropping out of the matching fund system would open the former Vermont governor to charges of expediency and dismay campaign finance reformers who are an important force within Democratic ranks.
“If Howard Dean decides to go live outside of it, I’m not going to wait an instant,” Kerry told the Boston Globe in a story published Thursday. Kerry has millions in personal wealth that he could spend on his campaign.
“I’ll go outside (if Dean opts out of the spending limit),” Kerry said. “Absolutely. I’m not going to disarm.”
Kerry pointed to Dean’s pledge to live under the limit imposed by the matching fund system.
“Somebody who wants to be president ought to keep their word,” he said. “It goes to the core of whether you are a different politician or a politician of your word or what you are.”
Asked when the Dean campaign would make a decision on foregoing the spending limit, campaign manager Joe Trippi told MSNBC.com last week, “We’re way away from that. It is so far off. You have to get near $30 million or $35 million before you’d ever think about it.” (Dean had a total of $10.5 million by the end of June.)
NOT SHUTTING THE DOOR
But Trippi said, “we’re not going to shut the door on it.” He explained that “obviously, given the way Bush is going to be able to pummel whoever (clinches the nomination) between March and the convention, you’d like to be able to do it if you can. I just don’t know if you can. It’s not a rational decision until you’re at $30 or $35 million.”
Would a decision to avoid the spending limit hurt Dean’s image?
“If we do it, people have to make a judgment about it,” Trippi said, stressing that such a move was merely “hypothetical” for now.
Sketching out a hopeful Dean scenario, Trippi said, “If a million Americans each wrote you a $77 check, that’s $77 million. We’re the only campaign that’s got a shot at pulling that off. We’re not going to shut the door on doing it.”
Asked if it was improper to take $2,000 checks but acceptable to collect $100 checks, Trippi said, “If two million Americans (each) gave you a hundred dollars, it would be really clear who owned the government and who owned you.”
So, what if two million Americans each gave the maximum amount, $2,000, to a campaign?
“If you could pull that off…” Trippi mused, and his voice trailed off.
“The problem right now is (if) 20,000 people give you $2,000, then you’re at $40 million,” he said. “Twenty thousand people have given you the ability to dominate the race. Look at the early months of this (campaign) — those guys who were piling up $7 million were doing it with $2,000 checks. I don’t have anything against it. I think there’s just something a hell of lot more democratic about getting to that number with people giving you $25 or $30.”
Noble said the Dean campaign will need to balance the advantage it would gain by avoiding the spending limit against the criticism it would create by doing so.
It would, Noble said, only make sense to opt out of taxpayer financing if a campaign could raise substantially more than the $44 million in spending permitted under the matching fund system.
“The Dean campaign would have to spend time educating the public about why the matching fund system doesn’t work any more,” Noble said. “Dean would have to argue, ‘I can either stay in the system — or I can win the election.’”